Property industry professionals are being urged to be extra vigilant following a surge in reports of mortgage fraud.
Aziz Rahman, senior partner at corporate fraud defence specialists Rahman Ravelli, warned that “the stakes are too high for those in property to simply plod on oblivious to the risks”.
Mortgage fraud has shot up by a whopping 20% in the past year to reach its highest level since 2012.
The latest Fraud Index from Experian has revealed an increase in ID theft within mortgage applications. In the first quarter of 2016, the proportion of mortgage fraud committed by ID thieves increased to 6%, the highest level since 2012.
Historically, third party fraud has accounted for around 4% of all mortgage application fraud.
With criminals coming up with increasingly sophisticated methods to defraud, Rahman said those involved in property deals – from estate agents and surveyors to mortgage brokers and developers – needed to look out for red flags.
“These cases tend to involve huge sums of money and often the people who commit the crime are never apprehended. Unfortunately, other parties involved in the chain can have the finger of blame pointed at them, even if they’re innocent.
“Those placed under close scrutiny can suffer the kind of reputational and financial damage that is difficult to reverse. It’s imperative, therefore, that anybody involved in a mortgage or property transaction knows what to do if they are accused of wrongdoing.”
In many cases fraudsters hack databases or intercept emails between individuals and their solicitors. Large payments are then diverted and fraudsters then disappear with the money.
Also known as conveyancing fraud, Action Fraud said this accounted for 36 cases between November 2015 and January 2016, with victims losing £76,166 on average.
Rahman added: “With such vast sums of money involved, and with fraud cases being reported more frequently, it’s no surprise that the authorities are launching increasingly sophisticated and effective investigations.
“With the spotlight firmly on them, property professionals need to take it upon themselves to reduce their chances of being accused of fraud.”
