How To Stay Safe Online When Moving (Or Not Moving) Home
We don’t like this at all.
It’s nasty, vicious and cowardly, and it’s on the increase.
Welcome to Chapter 11 of our Series, your Conveyancing Questions Answered All in One Place: Conveyancing Scams, Deposit Redirection, and Other Online Frauds
What Type Of Conveyancing Scams And Fraud Are There and Why Now?
There are three types of Conveyancing scams and fraud: Property Identity Fraud, Deposit Redirection Fraud and Seller or Conveyancing Firm Impersonation
“There are three types of Conveyancing scams and fraud: Property Identity Fraud, Deposit Redirection Fraud and Seller or Conveyancing Firm Impersonation”
A) Property Identity Fraud
Possession was, not for nothing, regarded as tantamount to “nine-tenths of the law”.
When a property changed hands, the Land Registry would issue a new Land Certificate, where there was no mortgage or issued a Charge Certificate, where the property was subject to a mortgage.
If you (or your Lender or your Solicitors) had the deeds to your house you were pretty safe.
Simple (like most good ideas) secure and very private.
Two Events That Changed the Property Landscape
1. Since 1990 the Land Registry has been an open register where anyone can check who owns what and what mortgage or mortgages exist on a registered property.
2. In 2003: the Land Registry went paperless.
So, what were once your private property details now, for a small fee, could be looked by anyone.
And, possession of title deeds, all of a sudden became less secure.
Cue: Fraudsters and Forgers dancing in the aisles.
How Property Identity Fraud Works
Property identity fraud is where the fraudsters try to “steal or deal” in your property by pretending to be you, the owner.
You could discover you had a mortgage registered against you which you did not take out or even worse have the property sold from under your feet (i.e. without your knowledge)
Who Is most at Risk of Property Identity Fraud?
Fraudsters would find it almost impossible to sell or mortgage your property without your knowledge.
Fraudsters want it easy, so actually having a mortgage on your property does make it harder for fraudsters
But, if you fall within six higher risk categories you must take extra care and be vigilant.
– Your property is empty
– You bought the property as a buy to let in a tenanted property – tenants can masquerade as the homeowner and attempt to forge documents in their name.
– You are an absentee owner spending many months out of the UK.
– Your property is empty as you are currently residing in a Nursing or Care Home
– Your mortgage has been paid off and is now mortgage free
– Your property is unregistered at the Land Registry.
What Precautions Can You Take to Avoid the Risk?
1. Land Registry’s Property Alert Scheme
You can take a few simple measures to protect yourself if you fall into any of the above categories.
If you sign up for the Land Registry’s own Property Alert scheme, you will be notified if anyone tries to change (e.g. sell or add a new mortgage) the title to your property.
You can sign up here and you can do so for free up to a maximum of 10 properties.
Please note you will still need, once alerted, to contact the Land Registry that the application should be stopped.
2. Enter a Restriction on Your Land Registry Title
You will need to enlist the help of your Conveyancer for this one as an extra layer of security.
You can prohibit the Land Registry registering either a sale or a mortgage unless a certificate certified by your Conveyancer accompanies any application.
This is a free service and you can see more here.
3. Absentee Owners Alerts
There are separate forms to complete depending on whether you reside in your property or do not. If you live at the property the fee is £40 and you can apply here.
If you do not live at the property there is no fee. You can apply here.
Both forms should be sent to the Land Registry, Citizen Centre, PO Box 74 Gloucester GL14 9BB.
What If It’s Too Late?
If you have unfortunately been a victim of property fraud then consult with your Solicitor first or contact the Property Fraud Line on 0300 006 7030 or firstname.lastname@example.org
B) Deposit Redirection Fraud
This scam is the newest and occurs when a computer hacker monitors email communications between a solicitor and a client.
The computer which has been hacked is invariably that of the client.
The scammers place unsuspecting malware into the client’s computer that lies dormant until…
Keywords are recognised.
The malware watches out for any keywords regarding requests for funds to buy a house or the payment of a deposit.
Then the scammers make their move.
They hack into the email account and contact the client disguised as the solicitor’s firm.
The scammers inform the client that the Conveyancing firm’s bank account details have changed.
The scammers give the details of the “new” account for the deposit to be sent.
Unknowingly, the client transfers their money to the “new” false account.
Thus, helping the fraudster to run away with the deposit money that can be many thousands of pounds.
Organised online crime gangs have stolen around £10 million from hacking into email communications between Conveyancing lawyers and their clients.
What Can Be Done To Prevent Deposit Redirection Fraud?
Both lawyers and clients need to be vigilant with all emails.
If you receive a last-minute bank account amendment email, make sure you double check with your Solicitors – preferably visit the office, or if that’s not feasible, speak on the phone with your Conveyancing Solicitor.
Most if not all Conveyancing firms now operate a policy similar to ours.
What Clutton Cox does to ensure you do not become a victim of Deposit Redirection Fraud
We would never send you last-minute emails informing you that our account details have changed.
We never deal with bank details by email.
We send a letter right at the start of your transaction informing you that:
We will not change our Bank Details during your move.
Communication is key. If you are unsure about anything, talk to your Conveyancer.
Face-to-face communication is the most secure way.
But, you also need to be vigilant and treat email communication with suspicion whenever it involves requests for the transfer of monies.
You can never be too careful in these circumstances; there’s a lot of money at stake.
If both Conveyancers and clients are aware of the potential dangers and take the right precautions, then we can fight Deposit Redirection Fraud together.
C) How Conveyancing Firms Have Been Duped By Property Fraud
Again, this fraud is relatively new.
The fraudsters pose as law firms – either by setting up an entirely bogus firm or a bogus branch of an established firm – to acquire the sale proceeds.
The fraudsters pose as both a seller and their firm of solicitors. Once the purchase monies ( which can include mortgage funds) are released to the “seller’s solicitors” on completion day the bogus law firm disappears with the money.
The Land Registry has started up a fraud hotline (see below) to try to avoid this happening and the Solicitors Regulation Authority issues bogus law firm alerts via its website and via Twitter.
10 Ways to Avoid Being the Victim of Property Fraud or Scams
Knowing you are potentially vulnerable is a good start.
Simple preventative measures will give you the added comfort and peace of mind to sleep more easily – if even you are not sleeping in that particular property.
Forearmed is Forewarned
There are a number of easy ways to help prevent property fraud and to protect against future problems.
1. Check whether your house is registered at the Land Registry?
If you bought anytime within last 30 years the answer is likely to be yes. If you haven’t and still have your deeds under the bed or in your safe then your property is likely to be unregistered (see below)
If unregistered ask your conveyancing solicitor to register it for you.
Land Registry will compensate you if you are the innocent victim of fraud
2. Keep your Land Registry contact details up to date?
The Land Registry has three strands to its advice
The Land Registry will write to you when it receives an application regarding your property, If your details are not up to date, you may not receive their letter or email.
The Land Registry, you’ll be pleased to learn, now allows you (free of charge) to provide three different addresses, including an email address and an address abroad.
Even better and for additional peace of mind, why not put the name and address of your Conveyancing Solicitors as one of the addresses.
3. Get your Conveyancing Solicitor to register request a restriction against your property at the Land Registry.
“Get your Conveyancing Solicitor to register request a restriction against your property at the Land Registry.”
This means that no one (in this instance a fraudster) can be registered as a new owner of your property without written consent from you or your Conveyancing solicitor.
This would be essential advice for you if you do not live at the registered property.
4. Instruct your Conveyancing Solicitor, where your property is unregistered to register your property voluntarily (i.e. without waiting until you choose to sell your property)
5. Consider Identity Fraud Protection from a credit agency such as Experian (other Agencies are available).
You pay a low monthly sum but will be alerted when for example someone is attempting to do a credit check on you. Often a precursor to identity fraud.
6. Ring if you suspect a property fraud the Land Registry property fraud (hot) line on 0300 006 7030 (Monday to Friday, 8.30am to 5pm) or request a call back using their online fraud reporting form
7. Most importantly keep your contact details up to date. You can now have more than one address placed on your property register, so why not put down your Conveyancing Solicitors address as well for extra piece of mind? (you can find out how to do that here).
8. Research your chosen law firm. Make sure the branch you are using is a legitimate branch of the firm. Call another branch to ask if you are unsure.
9. See if a relative or friend can recommend a law firm – if someone else has used them had not had any issues chances are they are reputable!
10. Check out the ‘Find a Solicitor’ tool on the Solicitors Regulation Authority website.
All is Not Lost
Fraud is, unfortunately, a fact of life.
Property and Land Registry Fraud are just the latest variations.
By taking a few sensible precautions and staying vigilant you have a great chance of avoiding those pesky and cowardly fraudsters who are after your property!