Did you know that the average property fraud costs a victim £107,669?
New collaborative research by ABC Finance and the Land Registry has revealed the level of property fraud in the UK. The study has found that there are twice as many property fraud claims then there are prevented claims, with hundreds of cases being reported over the last 14 years.
To help you avoid being caught out by a property scam – whether you are a homeowner or a tenant – here are 14 of the most common property scams to be aware of.
Revealed: 8 Types of Mortgage Scam
If you’re a homeowner or landlord, there are numerous ways scammers can attempt to profit from your property.
In the last 14 years, the ABC Finance and Land Registry study found that 678 property fraud claims were made with the average claim costing victims £107,669.
Property fraud accounts for 71% of fraud within UK local authorities. When you consider that, comparatively, ‘council tax’ has the second-highest rate of fraud but only accounts for 9%, this shows the extent of the property fraud problem.
Here are the main types of scam to look out for and advice on keeping yourself safe from property fraud.
1. Buying a house from a fake seller
If someone owns a property they do not live in, a fake seller can take advantage by posing as the homeowner and pocketing the funds. In this case, a fraudster will contact the Land Registry and attempt to change the details on a registered property, transferring control to them if they are successful.
If you’re selling a property, you can apply for a restriction: namely, the requirement that any sale or mortgage on your property must have your identity confirmed by a solicitor or conveyancer. If you live in the property, there’s a charge of £40. If you don’t, but own it privately, it’s a free service.
2. Friday afternoon fraud
Most completions happen on a Friday afternoon. So, it’s perhaps no surprise that this is the time when fraudsters take the opportunity to hack into the solicitor’s email accounts. They will then send you fake bank details for you to send cash to.
If your solicitor changes their bank details at the last minute, go to the office in person or at least give them a call to check the new details. Remember that a secure, trusted solicitor won’t send bank details via email.
3. Intercepted deposits
A similar fraud to the one above, this is where scammers intercept your house deposit by emailing you from a similar domain as your solicitor. For example, your solicitor’s email might be [email protected]. Here, the hacker would send an invoice from [email protected]. They look the same, but a slight punctuation change means you might send your funds to the wrong place.
Always be vigilant with emails and call your solicitor every time you are due to make a payment. Another way to be sure is to pay a small amount into the account, ring and confirm it’s received by the right person, then pay the rest.
4. ‘Free’ land
This is a fraud where land is advertised as free or available at a discount because the only owner has died, or it’s not registered with the Land Registry. However, none of this makes the land automatically free or even sellable in the first place.
Always obtain the title of the land before buying it, otherwise you don’t own it. Or, you must possess it for 12 years before you can apply to own it.
5. Investments that are too good to be true
Under this scam, you’ll be offered an investment opportunity in a property or a piece of land under the guise it will give high returns, but this isn’t true.
Consider any deals that are too good to be true and check that the organisation advertising the property or site are legitimate. Do some research too – visit the property or site, speak to the council and see if planning permission has been applied for.
6. Property auction scams
This is where you buy a property through an auction, but it is not as described.
To avoid this scam, never buy a property without seeing it in person.
7. Holiday home
Under this scam, properties that are primarily used as holiday homes are advertised as permanent residences to fool potential buyers.
Make sure you’re 100% certain on the status of a property by checking deeds and speaking to the current owners before you sign anything or any money changes hands.
8. Quick sale scams
This is where a scammer will agree to buy your home for a set amount (often to help you secure a quick sale) and then drastically drop the offered price at the last minute.
If you really want to sell through a ‘quick sale’ company, make sure you fully understand the terms of your agreement. You don’t want to get caught out by something in the small print when it’s time to sign contracts.
Revealed: 6 Types of Rental Scam
It isn’t just homeowners and landlords that have to beware of scammers – renting is also rife with potential for fraud.
Between 2014 and 2018 there were 18,645 reports of rental fraud in the UK. During the same period, Action Fraud reported that the amount lost to confirmed victims was £22.1m – equivalent to £1,396 per person affected.
Here are the most common forms of rental scams and how to make sure you aren’t caught up in them.
1. Unprotected deposits
In this scam, you lose your deposit because of various reasons the landlord gives, such as:
- You didn’t clean the property properly
- There was damage to the property
The problem is that you can’t challenge it because your deposit is not in an official scheme.
Here, the landlord has made the initial mistake by not protecting your deposit. You can challenge this in court and receive up to three times your deposit if it hasn’t been protected properly.
2. Fake landlords
Under this scam, you find a decently priced property online, but you don’t have the time or the money to visit the property in person.
You transfer your deposit and the first month’s rent directly to the landlord, then arrive on your move-in date to find out it was a fake listing. You can’t move in, you get no response from the fake landlord, and you lose your money.
Always go through official channels when paying money and visit the property in person.
3. The fake property
This is similar to the scam above, but this time the fraudster goes one step further. Here, they will have access to an empty property and pass it off as their own. Then, when you go to move in, you can’t get into the property.
Always use the proper channels and avoid over-keen landlords who are offering a cheap deal that they make out will go fast if you don’t pay straight away. Also, look out for multiple ads for the same property (different wording but the same pictures) and poorly worded advertisements.
4. Letting agent admin fees
Although admin fees were banned in June 2019, letting agents are still incorporating these into their contracts. This also is the case for cleaning, viewing, checkout fees, etc.
Always say ‘no’ and state the new ban. If you have been wrongly charged you can complain to Trading Standards.
5. Cash payment scam
This is where you pay your deposit or rent in cash, then the landlord argues you haven’t paid at all.
Remember that while wanting to be paid in cash isn’t illegal, you should always get a receipt.
6. Revenge victim
Under this scam, you complain to your landlord or ask for something to be repaired in your property and then end up getting evicted out of revenge. If you are evicted, you could lose your deposit.
This is a criminal offence, so follow these steps if it happens to you:
- Call 101 and make the authorities aware
- Seek advice from your local council
- File an illegal eviction injunction
- Take legal action to retrieve your deposit
- Submit a request for compensation