Taking care of your castle
Posted 14/12/2016 By: Nigel Maguire
The National Fraud Authority reports that property fraud is worth £1 billion each year. In 2015 the Land Registry reported a three year high in property fraud cases.
Property fraud occurs when a fraudster first steals a property owner’s identity and then sells or mortgages the property, taking the proceeds of sale or mortgage money for themselves.A property is usually the most valuable asset a person owns.It can be sold and mortgaged to raise money and therefore is an attractive target for fraudsters.Property fraud covers bogus landlords, who take deposits and rent in advance for properties they never owned, fraudsters who intercept email communications in transactions, obtaining client bank account information or re-directing the transfer funds into their own accounts, and con artists who have even set up bogus law firms to hide the fraud. Land Registry identifies that you’re at more risk if your property is rented out, is empty (or with owner abroad/in a care home), is mortgage free, and isn’t registered with Land Registry.
Although this type of property fraud is quite rare and you are unlikely to be a victim, it can have devastating effects.Prevention is therefore much better than cure.
What can you do to guard against fraud?Land Registry recommends you register your property with Land Registry; once registered, if you become an innocent victim of fraud and suffer a financial loss you can be compensated. You should make sure your contact details are kept current (you can have up to three addresses on the register, including an email address or an address abroad). Owners who consider their property is at risk can also register a restriction against activity on that property and this is free for those who do not live in the property.
Solicitors, banks and surveyors are required to apply rigorous procedures to prevent fraud. The common theme in fraud is stealing/using a false identity. For this reason solicitors need to carefully examine identity, and apply anti-money laundering checks.These checks have to be carried out for any client, for any transaction – property based or not. Sophisticated fraudsters will introduce themselves to firms as clients on a minor transaction and build a relationship prior to attempting a fraud. Identity vigilance and procedures may seem an inconvenience, but are vital to prevent fraud and the significant consequences fraud can have on individuals and businesses.
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