Mortgage and money fraud

Mortgage and money fraud

No matter how big or small your property purchase, it’s still possibly one of the largest amounts of money you’ve spent at one time.  This means that you are a natural target for thieves, particularly as more and more transactions are done online, and criminals develop more sophisticated ways of hacking into computers.  But don’t let that put you off buying a property or dealing with people online.  There are some easy steps to protect your mortgage and avoid money fraud.

How could my property be at risk?

If someone wants to try and “steal” your property, they would do this by pretending to be you, so that they could either mortgage the property and take the money, or actually sell it to someone else.

The Land Registry advise that you are more at risk if your property is one of the following:

  • Rented out
  • Empty
  • Mortgage-free
  • Unregistered

Over the last 10 years, around £55 million has been paid out under the Land Registry Indemnity Scheme because of forgeries.

Mortgage and money fraud Express ConveyancingHow can I reduce the risk to my property?

By taking a few easy steps, you can greatly reduce the risk of falling victim to potential mortgage and money fraud scams –

  1. Make sure that your property is registered at HM Land Registry. Your property will be registered if you bought it or mortgaged it since 1998. If you are unsure, you can check with the Land Registry who will be able to confirm if it is registered.
  2. If your property is not currently registered with the Land Registry, then you can apply voluntarily for this to be registered. Once your property is registered, you must then keep your contact details up to date. You can include an email address or an address abroad. Keeping contact details up to date is particularly important if you do not live at the property and have moved addresses since the purchase.  By having the correct details at the Land Registry, you will be notified if anyone tries to change any details.
  3. The second step is to sign up to the Land Registry Property Alert Service which is completely free of charge ( Once you have signed up to this service, the Land Registry will notify you of certain applications affecting the property you are monitoring. You will receive a notification for example for a new mortgage or change of ownership.  You can monitor up to 10 registered properties in England and Wales. You don’t have to own the property, so could monitor the property for an elderly relative for example.
    If you feel your property is particularly at risk from fraud, then you can apply for a restriction to be placed on your property designed to help prevent forgery. The restriction prevents the Land Registry registering a sale or mortgage on your property unless a conveyancer or solicitor certifies the application was made by you.

If you don’t know how to take any of these steps, or you need help doing them, you can ask your solicitor to set them up for you either when they purchase the property on your behalf, or at any time afterwards.

Money Fraud

Another growth area for fraud is where someone hacks into your or your solicitors emails, and changes the bank details, so that when you think you are sending money to your solicitor (eg the deposit for the property) or they think they are sending money to you (eg the proceeds of sale of a house) the money is actually being sent to the fraudsters account, and can be spirited away before anyone realises what has happened.

Most solicitors will have a policy or procedure in place to help combat the risk of money fraud online.  However, here are a few sensible tips for you to follow.

  • When you are first given the details of the bank account for transferring money, or you are giving over your details, send or receive them in two different ways. For example, you could insist that you will send them a hard copy letter with your bank details on, and they are to call you to verify them afterwards.
  • If you are calling them to check details, make sure you use the telephone number that is on their website, not on any email you’ve received, as that could have been changed too.
  • If you receive an email from them saying that their bank account has changed, call them to verify this, again being careful to make sure you are using a telephone number that you know is legitimate.
  • Tell them at the outset, in writing (not by email), that you will not change your bank details without verifying this both verbally and in writing with them. If they receive any notification that the money should be sent elsewhere, without you having gone through this process, they will know that it’s not come from you.
  • Take out insurance

Is Insurance an option?

Most risks can be insured against, so if you are particularly concerned about fraud against your property, you can find out what insurance policies might be available to protect you.

However, you shouldn’t limit your enquiries to just protecting your property against fraud.

You should also protect it against all the usual risks such as fire and theft.  Whilst this may be obvious, and something that you would have done on completion in any event, what you may not know is that you should insure it from exchange of contracts.  This is because you already have an interest in the property, and if something should happen to it between exchange and completion, you would want that interest to be protected.

You cannot guarantee that the current owner has adequate protection on the property, and if they don’t, you will be out of pocket.  Even if they do have insurance, that policy is in their name, not yours, and their insurer may not be willing to let you make a claim for any losses you have suffered.  So, the only way to guarantee that you will be protected if something were to happen to the property is to make sure you have an appropriate policy on the property as soon as the exchange takes place.

Don’t panic!

All of this doom and gloom advice might make you think that buying a property is risky.  The reality is that the risk only really exists if you don’t take adequate precautions.  Provided you are sensible with your money and your property, the chances of you being significantly at risk are very much reduced.

Disclaimer – our articles are designed to give you guidance and information.  There is no substitute for proper direct advice, particularly as everyone’s circumstances are different.  If anything in this article may affect you, please contact us for advice that is specific to your circumstances.

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