In this article, we’ll review all factors contributing to the latest ‘property fraud epidemic’, explaining the peculiar conditions that made England and Wales a haven for property fraudsters trying to hit big.
In the last few years, the rise of property fraud has been seemingly unstoppable. Supported by new digital means, fraudsters have engaged in bold identity theft schemes that fooled property owners, insurance companies and estate agents alike.
The most blatant cases hit the headlines and have quickly become exemplary of this worrying trend, with targets ranging from homeowners leaving their homes unattended to deceased victims ‘coming back to life’ thanks to unscrupulous impersonators.
Even companies are not safe from scammers, as taught by the infamous Dreamvar case.
Yet, why property fraud seems to now be the most widespread and popular scheme among cybercriminals?
Essential Ingredients to a Disaster Recipe
Several factors have created the perfect storm, paving the way for an alarming rise in fraudulent activities throughout the UK.
Just like a cooking recipe, these factors might not be alarming – or even negative – when taken individually. Yet, their combination brought upon the ideal environment to nurture disaster.
Highly Valued Assets…
As property portfolio holders might already know, one of the key contributors to this title fraud surge is the high value associated with assets like property, which unfortunately attracts the attention of cunning criminals.
The UK housing market is expected to continue slowing down in 2024. However, British homes and properties still offer a great chance for fraudsters to make money. It's not surprising that criminals can earn millions of dollars with just one successful scam.
Keeping in mind that property owners in the UK - especially first-time homeowners - are often unaware of the risks they are exposing themselves to by not being informed about best practices for staying vigilant, it is easy to imagine how appetising UK properties can seem to seasoned fraudsters.
Within an Outdated Property System
Saying that British homes are especially valuable cannot alone explain why cybercriminals are targeting them so frequently. After all, bank robberies would be even more profitable, yet we rarely come across such news…
The difference is that most major criminal activities are both unethical and remarkably difficult to carry out, involving high risks for the perpetrators.
An important feature that property frauds lack almost completely, thus being the ideal low-hanging fruit for cybercriminals.
Take, for instance, the issue within the UK property system.
A continued lack of modernisation left the British property system outdated and weak against cyberthreats posed by property fraudsters and identity impersonators.
To invert this trend, the whole property system should undergo a comprehensive modernisation process, incorporating advanced technologies and more stringent security measures.
This would make the system stronger against fraud and also make the process more efficient and clear for everyone involved.
Lack of Third-Parties Fraud Governance…
To make things worse, the lack of effective fraud governance by third-party entities, such as Companies House and DVLA, has only exacerbated the problem.
These institutions, which should ideally act as gatekeepers, have inadvertently become facilitators of fraudulent activities over time.
The failure to implement robust fraud prevention measures has allowed criminals to exploit loopholes and carry out deceitful plots with ease.
A more proactive stance on the part of entities like Companies House would be key to strengthen fraud governance practices:
- Implementing stringent verification procedures
- Conducting regular audits
- Collaborating with law enforcement agencies
These would all represent huge steps forward towards curbing fraudulent activities and restoring public trust in these institutions.
Moreover, the implementation of advanced technology solutions would change the scenario dramatically once again.
Artificial intelligence and machine learning algorithms could detect patterns and anomalies that may indicate fraudulent activities. By analysing vast amounts of data in real-time, it becomes possible to identify suspicious transactions and take immediate action.
Despite being quite difficult and expensive, addressing these weaknesses would create a welcoming environment for individuals and businesses alike.
…And Scarce Stakeholders’ Awareness
Another critical weakness that fraudsters love to exploit is the widespread misinformation among stakeholders of the UK housing market.
Homeowners, landlords, estate agents and companies all have a defining trait in common: they often lack the proper knowledge regarding the functioning of the UK housing market.
Plus, they seem to be unaware of their duties and responsibilities when it comes to preventing frauds – both for their own sake and for the sake of others.
For these reasons, educating about the various types of fraud and the preventive measures one can take couldn’t be more important.
How to do that?
A good start would be providing training programs and resources, equipping people and professionals with the necessary knowledge and skills to identify and report fraudulent activities.
But remember, at the end of the day, it is proactivity that truly makes a difference.
Knowledge is power, and by empowering stakeholders, fraudsters’ influence and agency will gradually – but inevitably – decrease.
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Navigating the Property Fraud Storm
Unfortunately, not all the issues we mentioned can be easily resolved in the short-term. On the contrary, overcoming most of these problems will require much time and effort because of their structural nature.
But this doesn't mean that we should just sit and wait, hoping frauds won't strike us in the meantime.
Without strong standards and regulations, staying informed and watchful is the best way to keep our properties safe. If we do this, adapting to the evolving tactics of fraudsters - and staying ahead of them – is not impossible.
This is exactly what inspired the creation of Title Guardian.
Our goal is to change power dynamics in the fight against title fraud. We want to give homeowners, landlords, and real estate professionals new tools to safeguard their assets.
Employing our digital monitoring systems, anyone can monitor their properties 24/7 without effort.
After registering and verifying the properties, any suspicious action is promptly notified to the owner via instant notifications.
Prevention remains our most effective weapon against fraudsters: to maximise its impact, we devise the most advanced and tech-savvy digital instruments in the market.
Click here if you want to know more about our services.
Navigating a storm like this might not be easy on your own, so let us join your crew.
