Derek Inkpin from local solicitors Wiseman Lee talks about fraudulent property transactions and the work that needs to be done to protect us from dishonest operators
Anyone who causes financial loss through dishonesty causes deep upset. Solicitors are required to carry out checks to safeguard clients from fraud.
Take a situation where you find a property to purchase. There is nobody living there and the estate agents say the owner is living abroad. The price is over £1m. You like the house and your offer is accepted. You instruct your solicitor to proceed. What nobody will likely tell you at that early stage is that your seller only has a mobile number and an email address and there is no existing mortgage on the property.
Your solicitor ascertains that a limited company owns the property and a Companies House check shows the company only came into existence after it was shown as the owner at the Land Registry. Not only is this suspicious, but legally wrong. Your solicitor is introduced to the seller’s solicitors, which is a known name but showing a new branch office, whose address details were not previously known. The solicitors only have a mobile number on their letterhead and emails, which immediately raises suspicion. When the mobile number is called, a recorded message states the caller will receive a callback. Clearly, something does not seem right.
Property transactions attract dishonest operators because the financial rewards are so high. So, here is a small flavour of what solicitors have to do to protect their clients and themselves from dishonesty:
Carry out checks in relation to the conveyancer acting for the other party.
Adopt a procedure to check against the significant risk of fraud.
Enhanced checking that the client is who they say they are and an assessment which identifies the warning signs of fraud.
Checking the identity details provided are genuine. A false passport or energy bill could dupe anyone if it looks genuine.
The Land Registry has launched a new biometric identity checking procedure, which hopefully will protect us all from losing our property to a fraudster. However, identity theft could lead to a crook making a mortgage application in your name and securing a mortgage advance before disappearing with the money. You, of course, have no knowledge of the transaction until the lender writes to you a few months later.
The newspapers, TV and social media now seem to carry stories of fraudsters every day. It is still rare but on the increase. All of us now have to be wary of those we deal with. Remember, a good fraudster will be charming to put you at your ease.
Wiseman Lee is located at 9–13 Cambridge Park, Wanstead, E11 2PU. For more information, call 020 8215 1000