Property hijacking scam: how to keep safe

Land Registry figures show growing trend of property fraud particularly where fake tenants commit ID theft to sell rented properties. Here’s how to keep safe.

Property hijacking – where fraudsters act as tenants and then pose as the owners of a property to sell it – is a growing problem in the UK.

HM Land Registry figures show the number of property fraud cases it has prevented has more than doubled from 20 on property worth £7.2 million in 2013/14, to 50 on property worth £24.9 million in 2016/17.

Since 2009, the HM Land Registry counter fraud unit says it has prevented 254 fraudulent applications for property worth over £117 million.

How it works

Typically, fraudsters will act as tenants and go through the motions to rent out a property using fake ID documents.

Once approved, one of the tenants will proceed to change their name by deed poll to match the owner’s name, which will be stated in their tenancy agreement.

With the owner’s name and matching fake documents, the rogue tenant can then go to an estate agent to put the property on the market and request to sell it to a cash buyer.

Typically, the ‘seller/s’ will put pressure on the unsuspecting buyer and their solicitors to complete quickly, leaving less time for the scam to be uncovered.

Enquiring about the title of the property is one of the most important parts of the conveyancing process when buying and selling a home, but it can be harder to spot if fraudsters change their names by deed poll to match the details of the real owner.

The first time the true owner is alerted to this devious crime is usually when the buyer’s solicitor attempts to register a change of ownership with the Land Registry. But by this time the fraudsters will have banked the money and disappeared.

Who loses out?

 While the owner will face a legal headache to undo the damage they should ultimately get their property back, the would-be buyers stand to lose the most in this type of scam.

In one case, Penny Hasting’s found her £1.3 million west London property had been ‘sold’ by her tenant.

The attempted fraud was spotted by HM Land Registry before the deeds were transferred. While Ms Hastings did not lose her property, the duped buyer lost out on the £1.3 million handed over for the purchase.

HM Land Registry says it has stopped 50 similar property hijackings in the past financial year, up from 33 in 2015/16.

The increase in property hijacking scams is believed to be fueled by a broader rise in identity theft – which hit a record high in 2016, according to fraud prevention service Cifas, accounting for more than half of all fraud.

But property hijacking is just one of the types of property fraud on the rise. Conveyancing scams are also becoming more prominent (read: Homebuyers beware: this hack and scam email fraud could cost you your next home).

Typically, criminals intercept money transfers in a property sale by hacking into email chains and convincing solicitors or buyers to deposit cash for a purchase into a scam account.

The number of these types of incidents has soared from 350 in 2012 to 700 in 2016 according to the Solicitors Regulation Authority.

Warning signs

Detective Constabul Richard Kirk of the Metropolitan Police told the Financial Times that homeowners, buyers and solicitors should watch out for warning signs of scams involving property.

“If tenants are hassling the agents, saying they need the keys and want to move in quickly then a simple check that owners or agents can carry out is to go around with a bunch of flowers a few days after the tenants have got the keys,” Mr Kirk said.

“If you see that the property is still empty then take that as a warning sign — fraudulent tenants rarely actually move into a house they are looking to sell on quickly.”

Mr Kirk suggests solicitors look out for people using brand new passports to spot scammers trying to impersonate the owners.

“Fraudsters change their names by deed poll to the landlord’s name and then try to sell the properties within a few weeks of doing so. If you’re presented with a new passport, ask to see the person’s old passport,” says Mr Kirk.

“Also, follow up on references. Don’t just phone the number given to you — do some investigating yourself and make sure you have the rightful owner.”

How to keep safe

People most at risk of property hijacking are those with rented properties, especially if there is no mortgage on them and they are not registered with HM Land Registry.

But those with empty homes and those that have properties they don't regularly visit are at risk too (read: Empty homes scam – how to keep safe for more)

If you’re a homeowner, you should sign up to the free alert service offered by HM Land Registry.

This will send an email alert whenever activity linked to your property occurs, like an application to change ownership details.

All you need is an active email address and the full address or title number of the property to be monitored.

Landlords with a portfolio of properties to look after could benefit from using this service as up to 10 properties in England and Wales can be monitored on one account.

It’s also a good idea to keep an eye on your credit report, as this will help you spot signs of identity theft. You can usually get a free trial, but you will have to pay an ongoing fee to get regular access. Compare the best deals here.

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