© Chris Tosic
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Picture this: you are driving down the road with a friend and you point out a rental house you own, which is currently let to a nice young family. 

Except that instead of signs of family life, you see that your house is empty and a large “For Sale” sign has been placed in its front garden. It turns out that your tenants are in fact ruthless fraudsters who have stolen your identity and put your house on the market. 

So-called “property hijacking” — where fraudsters pose as legitimate owners of a property and sell it on without the real owner’s knowledge — is a growth industry for criminals in the UK.

Figures from Land Registry, the official register of property ownership in England and Wales, show the value of the fraud has more than tripled since 2013 when it was £7.2m, hitting £24.9m in the year to April 2017. Regulators and the police are ramping up their advice to owners on how to avoid falling victim to the crime. 

Alasdair Lewis, director of legal services at the Land Registry, says: “Property is a high-value asset and therefore an attractive target for fraudsters. Your property, even your family home, can be sold and mortgaged to raise money without you even knowing. Fixing the mess can be distressing, time-consuming and costly.”

Land Registry has a counter fraud unit which works closely with the police and other agencies to reduce the risk of property fraud, he says. Since September 2009, it has prevented frauds on 254 applications, representing properties valued in excess of £117m.

Home hijacking takes place when fraudsters steal a property, most commonly by assuming the homeowner’s identity and selling or mortgaging the property without their knowledge. They then disappear with the money, leaving the true owner to deal with the consequences.

How does it work?

The most common form of the scam works like this. Criminals pay people to pose as tenants and rent a property (using fake identities). Then one person changes their name by deed poll to match the owner’s name, puts the property on the market and sells it to a cash buyer.

It is only when the buyer goes to register the change of ownership with Land Registry that the true owner — the landlord — is alerted. Although the owner faces a protracted legal headache, they will get their house back — but the cash buyers will rarely see their money again.

In a legitimate sale there are usually a few weeks between exchange and completion, giving solicitors on both sides of the sale time to assure themselves that both the buyers and sellers are who they say they are and everything is above board. But the fraudsters in a property scam do their utmost to rush a sale through, putting pressure on the buyer to complete quickly and leaving less time for someone to uncover the scam.

Investigating the title of the property is one of the most important elements of conveyancing, but solicitors say this fraud can be difficult to spot because the perpetrators change their names by deed poll to match the real owner’s name.

One owner who fell victim to the scam was Penny Hastings, the wife of journalist and historian Sir Max Hastings, who found her £1.3m rental property had been “sold” by the tenant without her knowledge.

In this case, Land Registry picked up on the attempted fraud before the west London home’s ownership deeds were transferred. But while Ms Hastings did not lose her property — Land Registry did not allow the transaction to go through — the duped buyer has lost the £1.3m she paid for it.

Land Registry says it detected 50 similar attempts to change the register fraudulently in the past financial year, compared to the 33 cases it uncovered in 2013.

Home hijacking has been fuelled by a broader growth in identity theft. Cifas, which monitors financial fraud, says the number of identity fraud cases hit a record high in 2016, accounting for more than half of all fraud.

Friday afternoon fraud

The hijacking scam is not the only form of property fraud on the rise: the detected number of “bogus conveyancer” scams has gone from 350 incidents in 2012 to more than 700 last year, according to the Solicitors Regulation Authority (SRA).

Beth Holden, property litigation expert at Anthony Gold solicitors, says property fraud has been rising over the past three years. “From bogus sellers gaining access as tenants, to misleading investment schemes, to the hackers intercepting money, criminals are getting very inventive in the ways they attack unsuspecting buyers and sellers,” she says.

The SRA this month updated its “risk advice” to property lawyers, warning specifically about “Friday afternoon fraud”. In this variant, criminals intercept the large money transfers involved in a property sale on a Friday afternoon, knowing that the theft is unlikely to be detected until the following week. They exploit techniques such as hacking, phishing and confidence trickery to convince unwitting conveyancers to send clients’ money to the wrong bank accounts.

“Law firms are targeted by criminals because they hold sensitive information and large amounts of money,” the SRA warns. “They can be a target for cyber crime and other scams, such as ‘Friday afternoon fraud’ or being tricked into dealing with a bogus law firm.”

According to the SRA, almost a quarter (22 per cent) of solicitors firms have reported being approached by scammers. At large firms this rises to 44 per cent.

Ms Holden, who represents victims of property fraud, last year acted for a homebuyer who paid £470,000 for a property, only to find the “seller” did not really own it. She says that in such cases it can be impossible to recover the lost money from the fraudsters as they are either untraceable or based abroad. But she says that if the conveyancing firm has failed to protect the transaction from the risk of fraud, they can be found liable.

In the case she cited, the court determined that both conveyancers — the buyer’s and the seller’s — were jointly liable for the fraud victim’s loss.

She added: “More recently, however, the law has tended towards blaming the buyer’s solicitor for any failure to spot a fraud. This seems to reassert the old buyer beware doctrine, where purchasers have to be extra diligent.

“All property purchasers need to heed the list of warning signs published by the Law Society and Land Registry, and resist the pressure for an uncomfortably quick completion.”

Beware the quick sale

David Smith, policy director at the Residential Landlords Association, says part of the problem lies in the fact that there is a huge amount of pressure on conveyancing solicitors to complete sales quickly.

“If fraudsters have a forged passport — which is very easy to get online these days — it can be difficult to establish whether someone is really who they say they are,” says Mr Smith. 

“But if a property is unmortgaged, vacant at the time of possession, high value and the seller is living abroad and wants a speedy completion, these are all red flags and should require due diligence.”

Detective Constable Richard Kirk of the Metropolitan Police says all parties in the sale should be on the lookout for warning signs. “If a seller is insisting on an immediate sale then scrutinise their justification for this,” says Mr Kirk. “Face to face meetings are key to uncovering a potential property fraud, as are background checks.”

Currently, the fraud is only being detected when the money has gone. But there are ways in which potential cases can be nipped in the bud, he says.

“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 says. “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.”

When it comes to the scammers who impersonate the owners, Mr Kirk suggests solicitors look out for people using brand new passports. “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.”

Those most at risk of this type of fraud are owners with empty properties or those with rented properties. Other easy targets are houses with no mortgage against them, those not registered with Land Registry and properties owned by people living abroad.

The chances of falling victim to property fraud may remain relatively low — but for those who are unlucky enough to experience it, the impact can be emotionally harrowing and financially costly.

Laylah De Cruz at Southwark Crown Court this year, where she was convicted of conspiracy to commit fraud and jailed for five years

Jailed for fraud — the model and her mother

Laylah De Cruz, a model, asked her mother, Dianne Moorcroft to pose as the owner of a luxury £3m London home to convince estate agents and property lawyers that she was putting the property on the market. 

The scam began in 2014 when the duo conspired with others to rent the four-bed property in Kensington. Once the tenancy of the property was secured, Ms Moorcroft changed her name by deed poll to that of Margaret Gwenllian Richards — the true owner of the house.

Ms Moorcroft, 62, of Blackpool, then obtained a UK passport and a Dubai resident’s permit and presented herself to solicitors in London as the property owner in order to sell the home.

She managed to secure a £1.2m bridging loan against the property, sending the money (minus the legal costs) to Dubai, where it was withdrawn before the deal was flagged as fraud. 

The Metropolitan Police launched an investigation in October 2014 after Land Registry reported suspicious activity around the Kensington property. In March this year Ms De Cruz was jailed for five years, while Ms Moorcroft was sentenced to three years.

Prosecutor Teresa Hay said during the trial: “The fraud was as simple as it was audacious. Dianne Moorcroft changed her name by deed poll in summer 2014 solely for the purpose of participating in this fraud.”

Richard Kirk, a Metropolitan Police detective who worked on the case, says: “As these women conducted this devious fraud, it is clear that it didn’t occur to them that official agencies would be able to see through their scheme and this was their undoing. The wider investigation to trace additional members of the network is ongoing.”

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