Paul Jones * | Watch Summary
In December 2022, Paul Jones agreed to buy a property in Ilford, East London which was due to be sold at auction. He made an offer pre-auction which was accepted. Paul instructed his London lawyers, who he had used many times before and the seller instructed a reputable law firm, so far so good.
The legal conveyancing process took its natural path, and he agreed to exchange contracts on 5th April 2023 and complete on the 6th April 2023, just prior to the Easter bank holiday weekend. Including stamp duty and legal fees, Paul sent his lawyer almost £400,000 from personal and family cash resources and the transaction completed.
Paul eventually received the keys to the property from the estate agent after the bank holiday and made his way to the property where he was expecting vacant possession.
Upon arrival, instead of vacant possession as contractually promised, he was greeted by 3 generations of a Polish family with a friend who had sublet the property on a casual basis from the fraudster, paying him cash to stay there. Upon telling them the property was now his and they were essentially trespassing, and he was about to call the police, they agreed without hesitation to vacate the property immediately and they made their own way to Greenwich in a Uber van with their belongings.
Paul made acquaintances with the neighbours and explained that he had just bought the property from Mr Grey*, they expressed some surprise that the property had been sold, and moreso that Mr Grey had not informed them that he was selling up. Paul exchanged details and pleasantries, then drove home.
Upon arriving home his evening was about to take a turn for the worse. He received a phone call from the new neighbours that turned his world upside down. The neighbours had called the true owner, Mr Grey who had advised them that he hadn’t sold the house and had no intention of selling it.
Paul after a few frantic calls back and forth realised that he had been duped and had indeed bought the property from a fraudster that had impersonated Mr Grey.
He found himself in an unfathomable position, his lawyers had sent nearly £400,000 to the fraudsters lawyer, and this money had been settled to the fraudster within minutes. He had no legal rights to the property and had no idea what to do next.
He called the police who advised him that there was nothing they could in the circumstances as there was no threat to life and the incident had already taken place. He was later sent a crime reference number.
Following the call, Paul called Action Fraud, who, after he had relayed the facts said they could not help and advised him to contact the police.
What we’ve learnt since and where we are today.
- As at the 14th August 2024 (17 months later), no resolution has been made and Paul is still almost £360,000 out of pocket. HMRC have refunded the Stamp Duty.
- The respective lawyers are still battling it out to establish liability. It could take many more months, or even years to resolve this matter.
- The investigation process soon established that the fraudster had rented the property from a well-known High Street Lettings Agency (National Chain) and planned the fraud months in advance.
- This meant the fraudster needed to create 2 fake identities – One for the letting agent to rent the property ahead of the fraud, and the other to impersonate the true owner to execute the fraud.
- Once he had access to the property, he set about impersonating the true owner and started by changing his name by deed poll to that of the owner and requesting updated utility bills, a simple task considering he had access to the address for post.
- The fraudster then applied for a ‘genuine’ driving license which was sent by DVLA without scrutiny or delay.
- As the sale progressed, biometric checks were completed on the fraudster to verify his ownership of the property, which successfully passed, and were not subject to any further scrutiny because his ‘new ‘name matched the title register identically.
- Once the law firm had possession of the successful identity report, instead of raising any flags to prevent the fraud, this check essentially gave them the confidence they needed to proceed. Why wouldn't it?
- Not satisfied with a £400,000 windfall, the fraudster sublet the property on to tenants that paid him in cash.
- On the upside, the police and Action Fraud kindly sent letters of sympathy and Action Fraud called Paul to see if he needed any support – the person was reading from a script.
Summary
- Biometric identity checks, even to safe harbour standards, do not prove you own a property.
- Law firms can only work with the tools they are given. As it stands, if they are in possession of a biometric check that matches the registered proprietorship, they have to rely on it. There is no crystal ball to ‘guess’ if its correct or not.
- Landlords have no true visibility of their properties once occupied by a tenant who may be a bad actor.
- The crime of title fraud is low on the priority of the police as they do not have the resources to tackle it. Prevention is better than cure
*Names have been changed to protect the identities of the victims whilst this litigation is active.
