Property Fraud: What is it, and how can I protect myself from these scams?

The UK seems to be drowning in an epidemic of fraud; in 2023 the amount lost to all types of fraud was £2.3bn according to the accounting firm BDO, reported in The Guardian this year.

This number is likely to be an underestimate, as many either don’t want to admit to falling for fraud, or don’t recognise that they’ve been scammed.

What is property fraud?

Property fraud can broadly fall into two categories: there is fraud affecting banks and mortgage providers, and there is fraud that effects a private individual.

We’re going to look at ways that as a private individual, you can be targeted by property fraud, and once armed with this information, you can protect yourself from it.

Who is most at risk of property fraud?

You are most at risk from fraud if:

• you leave your property vacant for a long time;
• you have paid off your mortgage;
• you are a renter;
• you are looking for a holiday let;
• you want to buy a property to use as a holiday let;
• or you are a landlord.

So pretty much anyone can become a potential fraud victim, and it’s something we all need to look out for.

6 of the most common types of fraud involving property

In our last article on property scams, we warned about two types of fraud, Stealing your Home and Payment Diversion. We cover those and a few more below.

These are some of the most common types of property fraud in the UK at the moment, but you can be sure that more will arise. We also suggest ways you can avoid falling victim to them:

• Title and registration fraud: This involves stealing a homeowner’s identity and using it to change the legal ownership of their property at the Land Registry. This can be done in a number of different ways, including forging documents or exploiting loopholes in the Land Registry’s system.
  This is much easier to accomplish if the perpetrator has access to the post at the target address, so beware if your property is rented out or empty. You should also set up a simple property alert at the Land Registry: https://propertyalert.landregistry.gov.uk/propertyalert/.
  
• Identity theft and impersonation: This happens when fraudsters try to impersonate anyone involved in a property transaction, such as the owner, seller, buyer, lender, or conveyancing solicitor. They might use stolen identification, or create fake documents to trick people into handing over money.
  It is easier to avoid attempts to steal your identity if you keep your personal details safe, and do not publicise on social media that you are buying/selling/moving home.
  
• Payment diversion fraud: A growing concern where criminals hack into email communications between a solicitor and their client. They then impersonate the solicitor and attempt to trick their client into sending money to a different bank account.
  This is fairly simple to avoid; make sure you send money to the correct account by initially depositing £1, then confirming its arrival before sending the bulk of the money.
  This is fairly simple to avoid; make sure you send money to the correct account by initially depositing £1, then confirming its arrival before sending the bulk of the money. It is also unwise to receive bank account details by email, and if you do you should carefully check the email address first, or confirm in person. 
  
• Fake buyer/seller scams: Another scam occurs when a criminal poses as a buyer who makes an offer above the asking price, pressuring the seller to rush into the sale. The ‘buyer’ may then back out before any money is exchanged, but only after they’ve obtained key information about the property and its owner. An alternative scam is when the criminal acts as a seller who then convinces a potential buyer to put down a deposit on a property that does not exist.
  The best way around this scam is to visit any property you are considering buying or renting, as having a photo of a property is no proof of ownership. Remember that if an offer is too good to be true, it usually isn’t.
  
• Rental scams: In rental scams, fraudsters advertise fake rental properties or impersonate real landlords to collect deposits or rent from unsuspecting tenants.
  Once more, remember that it is not enough to see a photo of a property – you should actually visit it.
  
• Fake competition: This happens when someone is trying to sell or rent out a property and wants to increase their financial gain from it. The fraudster then tells someone else to pretend to show an interest in the property, attempting to engineer a ‘bidding war’ – and either sell it or rent it out for more. And in today’s frantic need for homes to rent or buy, this scam can be amazingly effective.
  Sticking to your guns when bidding is the only way to guard against this con, as there are few ways of working out if the fake competition is in operation.

By being aware of these different scams and types of fraud, you can be more vigilant and take steps to protect yourself when buying, selling, or renting property in the UK. 

If you have fallen victim to fraud …

If you have fallen victim to criminal behaviour, don’t be tempted to post your problem on social media sites. The consumer magazine Which? conducted an investigation into fraud where they posted on x.com looking for advice. The result? A lot of automated bots answered, offering to defraud them some more.

Of course, the best recourse is always to avoid falling for frauds and scams in the first place, and with something as valuable as your home you need to stay aware.