Property fraud in commercial property conveyances, sometimes called ‘Friday afternoon fraud’ is on the increase. In this blog, we look at how these frauds are perpetrated and the simple actions that can reduce the risk of falling victim to them.
A recent survey by property search company TM Group revealed that 80% of conveyancing solicitors are “definitely more worried about security and risk of fraud in 2016, compared to 2015. Further, Action Fraud – the UK’s national fraud and cyber crime reporting centre, reported a combined loss as a result of property fraud of £2,665,819 between November 2015 and January 2016 alone. 2017’s figures are likely to be higher again.
What is property fraud?
There are two typical patterns of fraud relating to property. The first is where financial information is recovered from one of the parties to the transaction, and legitimate funds diverted into fraudsters’ accounts. The second is where a ‘seller’ with no right to sell (sometimes a tenant) fraudulently receives profits of sale, leaving an innocent buyer without the property they have ‘purchased’ but also often with the liability to meet mortgage payments.
The good news is that there are simple steps that can be taken to prevent commercial property conveyancing fraud. The following tips are easy to implement and free.
Tips for preventing commercial property fraud
1. Carry out identity checks
Before transferring any monies or providing sensitive or valuable information, check the ID of the person you are dealing with, and be sure that you are completely satisfied they are who they claim to be.
2. Avoid using email to confirm bank details
Try to avoid swapping financial details via email. Emails can be hacked and there have been cases of criminals creating fake message, replacing legitimate bank details and diverting large sums to their own accounts. If you need to provide or receive details this way, always confirm their accuracy before completing a transaction.
2. Transfer a nominal sum first
Before transferring significant sums, send a nominal amount first, say £1 and confirm receipt before sending the balance.
3. Make use of fraud-fighting tools
The Land Registry’s free Property Alert service issues email alerts when certain searches or applications are made against a property. Where these could signal fraudulent activity owners can take immediate preventative steps to protect their assets.