The UK real estate market can be a haven for those seeking their dream homes or lucrative investment opportunities, but it's also a fertile ground for fraudsters who prey on unsuspecting victims through title fraud and identity impersonation. Throughout this article, we will step into the shoes of a property fraudster, explaining how they act and, more importantly, how you can protect yourself and your financial well-being.
With the rise of online marketplaces and the increasing availability of digital tools, property fraud and title fraud have found new platforms for deceit. Unscrupulous individuals posing as landlords have adapted to these changes, making it even more crucial for potential tenants and home buyers to be well-informed and vigilant.
When in the delicate process of buying or renting a house, anyone can become a vulnerable target. Nonetheless, it is still possible to defend yourself against such deceitful schemes by learning how fraudsters operate and how title fraud is usually conducted.
The “Fraudulent Landlord Scam”
In a recent report by the National Residential Landlords Association (NRLA), alarming incidents of prospective tenants being defrauded by criminals posing as landlords have come to light. These criminals employ cunning tactics to swindle victims out of hundreds of pounds by advertising fake properties for rent.
Typically, once a potential tenant expresses interest in a property, the fraudsters go to great lengths to convince them to part with a deposit to secure the property. In some cases, they may attempt to extract upfront payments.
Once they've collected the money, the fraudulent landlord swiftly disappears, leaving the buyer or tenant in a dire financial and housing predicament.
Let’s now see in greater detail how these frauds are conducted and what you need to know to remain a step ahead of potential threats.
A fraudster’s Ideal Playing Field: Non-Mainstream Platforms
Fraudulent landlords typically employ non-mainstream channels and platforms to advertise ‘their’ properties.
They may use local Facebook groups or community forums to find houses in the areas they intend to target. These channels, widely used yet rarely monitored, make it easier for them to hide in plain sight.
How it starts: False Property Listings
First, these con artists pretend to advertise a property that may or may not exist, without any legal right to sell it or rent it out. They expertly craft enticing property listings with appealing descriptions and attractive photos to lure potential victims.
Everybody knows that a good bargain is always welcomed: unfortunately, this also means that offering great deals is one of the most widespread triggers employed by fraudsters.
Therefore, next time you see an offer too good to be true, don’t just rush in without a proper background check.
It’s All About the Money: Deposits and Upfront Rent
Once a victim shows interest in the property, the fraudsters only focus is to get their hands on a huge money deposit. If this first step is successful, they may even attempt to extract upfront payment from the unsuspecting buyer.
If you ever find yourself in such an undesirable situation, you will soon find out that, at this point, it becomes almost impossible to trace back the fraud perpetrators: leveraging off-shore bank accounts and fake IDs - as in this case - fraudsters can literally become invisible to authorities and regulatory bodies, leaving victims without any hope of bringing them to justice, let alone get their hard-earned money back.
Guarding Against Property and Title Fraud
Protecting yourself from property fraud and title fraud is paramount as you approach the housing market in search of a property to rent or buy.
Now that we have covered how fraudsters operate, let’s see which preemptive steps you can take to minimise your risk and ensure your property transaction remains secure.
Always Verify the Landlord
Whenever possible, insist on viewing the property with the landlord or their authorised agent. Gather as much information about them as you can. Take a photo of any documentation they show you, and do not agree to pay a deposit before inspecting the property.
A meticulous review of relevant documents can be crucial in ensuring your safety, as well as insisting on visiting the property.
Don’t worry about being too demanding: if they are truly legit and interested in your potential offer, landlords will accommodate you in any way they can.
Rely on Reputable Agents
If you’re planning to contact an estate agent, be sure you are entrusting your financial stability to someone competent enough to handle it properly.
It may seem exaggerated, yet a significant number of property frauds take place because estate agencies don’t bother to pay enough attention to monitoring and verifying the reliability of potentially malicious actors.
On the contrary, if you're dealing directly with a landlord, ensure that you verify their identity by obtaining copies of key documents such as their driver's license, passport, bank statements, and utility bills for the property in their name. Having those at hand will make background checks much more feasible.
Check for Trade Body Membership
When using a letting agent, look for tenants who are members of a trade body like The UK Association of Letting Agents (UKALA) or the Association of Residential Letting Agents (ARLA). For direct dealings with landlords, opt for those who are members of a professional body like the NRLA.
Verify Contact Information Carefully
Try to obtain a fixed telephone number to communicate with the landlord rather than relying on a mobile or WhatsApp number, which can be easily disposable. Fraudsters can equip themselves with fake telephone numbers, purposely designed to be used in scams and hardly traceable at best.
Read here for a more detailed account of next-gen identity impersonation frauds.
Demand Deposit Protection and Mind the Deposit Limit
Ensure that the landlord or agent is committed to protecting your deposit in one of the three Government-backed deposit schemes: these are the Tenancy Deposit Solutions Limited (TDSL), The Deposit Protection Service (DPS), and The Tenancy Deposit Scheme (TDS).
It's crucial to know beforehand which scheme they intend to use.
You also need to critically evaluate the amount of money you are being asked when making a deposit. Keep in mind that the average house deposit for a first-time buyer in the UK is around 15%. If you are renting a property, deposits should never exceed a maximum of 5 weeks' rent.
Any requests for a higher amount should raise some suspicion.
Choose a Traceable Payment Method
Whenever possible, pay your deposit using a credit card or via direct debit, as these payment methods provide additional protection from banks.
Never commit to hand over cash, even if the landlord insists: this payment method offers little to no recourse in case of title fraud and could potentially cost you a fortune.
Do Your Research: Validate Landlord's Details
You can validate a landlord's details by searching the Land Registry for a fee. These checks can help confirm the legitimacy of the property and the landlord.
Remain Cautious
Did you put into practice all our tips to defend yourself from fraudsters?
Well done. But don’t let your guard down just yet.
Do not release any money until you are 100% sure of the legitimacy of the property and the landlord.
Remember that due diligence and caution are your best defence in an ever-evolving landscape of fraud and deception.
Stay informed, stay safe, and enjoy a secure real estate experience.
Reporting Fraud: What to Do if You Suspect a Scam
Property frauds, together with identity impersonation cases, continue to pose significant risks in the real estate market. By following the steps outlined in this article and staying vigilant against evolving scams, you can better protect yourself from falling victim to these deceitful schemes.
But what if you are dealing with a bogus landlord or have already fallen victim to a property fraud or identity impersonation scheme?
As you might have guessed, it's crucial to take swift action.
Contact Action Fraud
Always report the incident to the police's dedicated cyber-crime unit, Action Fraud. They specialise in handling such cases and can take the necessary steps to investigate and potentially bring the fraudsters to justice.
Register to Title Guardian
If you need a next-gen level of protection against title fraud and identity impersonation, Title Guardian might just be the ideal solution you are searching for.
Thanks to our digital platform and monitoring tools, we can observe any suspicious actions related to your property and swiftly inform you of the danger before it is too late. First-time buyers registered to our services secure their homes against any kinds of property fraud.
In case you need to rent one of your properties, securing it through Title Guardian will be instrumental in ensuring your tenants do not conduct illicit activities and, at the same time, it will represent a wonderful incentive to ensure potential tenants you are reliable and can be trusted without hesitation.
Explore our offers and choose the plan best suited to your needs: we will take care of all the rest.
