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A London solicitor has been accused of being part of an alleged fifty million pound mortgage fraud.  This case marks the latest in a plethora of high profile mortgage and property fraud cases in the last year.

Mortgage fraud alone is estimated at 700 million Pounds per annum.

Property, land and other buildings are amongst the most expensive assets people own. Property can be sold or mortgaged to raise funds . This clearly makes them high priority targets for fraud.

The fraud process is often initiated by the con man by changing the legal owner’s registered addresses at the Land Registry enabling the fraudster to gain control over the house (3 addresses can be listed).Even if a fraudulent transfer of a property is proven to be illegal (which is by no means certain) a loan registered against the property can still be enforced against the true owner (Barclays v Guy), enabling the secured lender to potentially reclaim the property for unpaid mortgage payments. In some cases it is possible to get compensation from the land registry, but this can be an arduous and drawn out task.

Nationwide recently merged with and took over the Cheshire Building Society.Conveyancing panels for the Nationwide may be pruned an a result of this Fraud. Earlier In the face of the Britannia Building Societie’s recent exposure to mortgage fraud they had to cut 3700 conveyancing firms off their panel (Including London and Birmingham Conveyancing practices) They indicated that this was a requirement from their insurers.

In this latest high profile case, Simon Lawrence, 48, has been charged with conspiracy to obtain a money transfer by deception, after Cheshire Building Society reported him and five others to West Midlands Police.

The group, including London conveyancing solicitor and Birmingham solicitors and a property developer, are accused of buying six properties and distributing them between a web of companies at increased prices using fake documents.

The group has stacked up an amazing £50,000,000 of unpaid mortgage advances, obtained through identity theft.

At the time of the alleged crimes, Mr Lawrence was a senior player in a conveyancers firm which carried out conveyancing in London and conveyancing in Hertfordshire. He is no longer working for the Darlingtons, the London Conveyancers.

In related news, Chelsea Building Society admitted to having lost £41,000,000 through mortgage fraud in August, and is currently negotiating a merger with the Yorkshire Building Society.

Safe Internet Blog conveyancing, conveyancing lawyers, conveyancing solicitors, fraud, identity fraud, identity theft, mortgage fraud

What has caused this new spike in property fraud?

Identity fraud is not just about credit cards any more, fraudsters are after your property also. Property fraud is booming like never before and fraudsters are finding brand new and smarter ways to con unsuspecting property owners.

A spokeswoman for the Land Registry ( which is a government body responsible for maintaining a record of who owns what land in England and Wales ) said: “We recognise that fraud is a problem and we want to make more stringent checks about who is dealing with sensitive information.”

Paul Doxey, a forensic accountant at Navigant Consulting, told Channel 4 News “In the in the 80s and 90s we saw a lot of property fraud, but what’s different in the recent frauds is the explosion of ID fraud. It’s now far easier for fraudsters to obtain false IDs through the black market, which they can use as a cover while they carry out these frauds.’” The Daily Mail last month reported that Gary Miller, a fraud solicitor with Mishcon de Reya Solicitors, said a lack of enforcement funding meant that property fraud had not been ‘anywhere near high enough on the police agenda’.’ Our experience indicates to us that what we see now is just the tip of the iceberg,’ he added.

Property fraud occurs by con men obtaining false ID papers of a property owner and then going to the Land Registry to transfer ownership to a new name. Under the new name they take out a mortgage and then run off with the money, leaving the owner facing repossession.
The Registry says it received fifty five complaints of information having been obtained from its website for the purpose of fraud, which resulted in a massive payout of£12 million of compensation over the two financial years from 2005 to 2007.

Latest statistics show that the risk of becoming a victim of fraud is highest still following a divorce, when a property is vacant or bought to let, when the owner is overseas or absent, or when the owner is infirm or in a home.

The Land Registration Act 2002 abolished the legal significance of a Land or Charge Certificate, possession of which had until then been an owner’s proof of title to registered land. This is part of the industry’s move towards online conveyancing, but until this system is fully actualized incorporating the use of encrypted electronic signatures, the current situation could leave some homeowners at risk from fraud.

With current sophisticated counterfeit technology, a determined fraudster could, quite easily, obtain sufficient fake ID and obtain all the information he/she requires from the public register at the Land Registry to carry out a fraudulent property transaction.
If we consider the following two hypothetical scenarios, where Landlords and owners of empty properties could be especially at risk from this form of identity theft:

1. A Landlord unwittingly rents out his property to a con man, who has already provided one set of defrauded ID prior to commencement of the Tenancy. As he/she is now in exclusive occupation of the property, it should not present the con man with too much difficulty being able to pass himself off as the registered owner – to an unsuspecting Conveyancer, Surveyor, Estate Agent and Purchaser. As the Land (or Charge) Certificate no does not have to be produced anymore, this leaves the counterfeiter free to sell either the whole or part of the property, or alternatively secure a charge by re-mortgaging to the full market value; in both cases palming the net proceeds before running off to the Carribbean

2. An empty house could also be vulnerable and can either be systematically broken into to collect correspondence, or the fraudster could easily provide a different correspondence address to the lawyer he chooses to instruct, using defrauded documentation. The house would then be charged or sold and the fraudulent transaction could remain undetected for months, or even years, until such time as the true owner later begins to deal with the property.

A recent and alarming Court of Appeal decision has Okayed banks to repossess properties owned by the unwitting victims of property fraudsters.

In Barclays Bank v Guy a fraudster made a transfer of Mr Guy’s property to himself and successfully had the transfer of title approved by the Land Registry so that he became the registered proprietor of the property. He then borrowed money from Barclays Bank and secured the borrowing with a mortgage against Mr. Guy’s home.

Once he became aware of the fraud, Mr Guy applied to the Court of Appeal to rectify the fraudulent transaction and have himself re-registered as the freeholder of the home and the mortgage in favour of Barclays deleted.
The Court of Appeal determined that it was OK to reinstate Mr. Guy as the registered owner of the house but the mortgage to Barclays could not be removed. This meant that Barclays still had a valid power to sell the home for non payment of its loan even though Mr. Guy was not the person who had borrowed the money.

This is the staggering decision which basicaly means any of us could find our property being repossessed because of the actions of a fraudster. Anyone owning property they do not occupy themselves is particularly vulnerable to this type of fraud.

What can be done to protect your property assets? “Prevention is better than cure,” said Malcolm Tarling from the Association of British Insurers. “People need to take reasonable steps” It is imperative that home owners do what they can to help prevent fraud and to ensure their ownership in the same way that they protect other things they own.

A property owner could definately consider adding a standard form restriction on their title register, particularly where their house is not subject to a mortgage (the presence of a mortgage and the usual accompanying restriction hopefully reduces the chance of fraud involving a mortgaged property). The purpose of the restriction would be to prevent the Land Registry from registering a disposition (such as a transfer, lease, charge, or even an easement) without a lawyer certifying that, for example, the transferor is indeed the registered owner.

This restriction provides a degree of protection against an opportunist scammer. Although this would not stop a determined fraudster from succeeding, it does present an obstacle and may go some way to protecting the true owner from any unauthorised dealings.
Find out what you can do to assist preventing property fraud

Safe Internet Blog fraud, identity fraud, identity theft, illegal mortgages, property fraud

Many people are concerned about the problem of identity theft these days. It’s easy to think of it as something that happens chiefly to other people – but it’s very much more common than you might think. In developed countries like the USA, the UK and Australia around about 1 in 5 of the population will be impacted by identity theft in some shape or form.

Many people worry about using the internet and all the different types of identity theft that can take place online. The facts of the matter are that identity theft is very often a low technology crime. Fraudsters generally adopt much more basic methods to steal information. Which doesn’t mean that you shouldn’t take care online or keep your PC or notebook secure of course.

Some of the main methods used by criminals to obtain sensitive personal information include:

Theft of mail – the traditional paper based type. Thieves may try to intercept mail before it arrives or, even simpler for them, retrieve it from the trash. All they need is a credit card bill, or even a utility bill and they’re in business. What about all those unsolicited offers of credit, loans or new credit cards that you receive so often? Finding one of those in your garbage would be like gold dust for a fraudster.

The theft or loss of a wallet or purse. Once they’ve got their hands on your plastic they can really have some fun.

Looking over your shoulder whilst you use an ATM machine. This is called “shoulder surfing”. This technique is used a lot.

Even more mundane than the above – how often do you give out personal details over the phone, possibly for perfectly legitimate reasons, within earshot of other people? If you work in an open plan type office environment, it may be more frequent than you think.

These are just a few examples of the low tech methods used by fraudsters to steal your identity. Fortunately there are plenty of common sense precautions that you can take which will significantly reduce the risk of becoming an identity theft victim:

Make sure your mailbox is secure.

Make sure that all discarded mail which contains any sensitive personal information is shredded before you dispose of it.

Shield your PIN when using ATMs.

Do not write your PIN down anywhere. Do not share any passwords or information with anyone.

Do not give out personal details over the phone if you think the receiver does not need to know them (even if they are “official”). Even when this is necessary and justified, don’t give out this type of information within the earshot of anyone.

Check your bank statements and credit card account details on a regular basis. Do this on the web if you can and get a regular “live” update. You will spot any irregularities much faster by doing this and be able to limit the damage by acting quickly.

Safe Internet Blog different types of identity theft, id fraud, id theft, id theft cases studies, identity fraud, identity theft

Identity theft – also known as ID theft, identity fraud and ID fraud – describes a type of fraud where a criminal adopts someone else’s identity in order to profit illegally. It is one of the most rapidly growing types of fraud in many developed nations.

In Britain ID theft is increasing at the rate of 500% per annum and, according to Which Magazine, 25% of the population have either been victims themselves or know somebody who has.

In the USA, a report issued by the Better Business Bureau revealed that, in 2004, over 9 million Americans became victims of one of the many different types of identity theft with the total sum defrauded being $52.6 billion.

With figures like this, it’s no surprise that there is a certain amount of concern regarding computer and internet security. After all, the internet is basically a mechanism for exchanging information and the possibility that some of the information exchanged may be more than intended is never far from many internet user’s minds.

It’s easy to imagine criminal masterminds worldwide using the internet to hack into computers in order to gain access to information with which to advance their devilishly cunning schemes. However, as the report reveals, the facts of the matter are somewhat more prosaic and the internet, far from exposing you to greater risk of identity theft, can help to dramatically reduce your losses if you do fall victim this type of fraud.

According to the Better Business Bureau’s research the main methods by which criminals gain access to information used for identity theft fraud are as below:

1. Lost or stolen wallet, chequebook or credit card. 28.8%
2. Accessed as part of a transaction. 12.9%*
3. Accessed by friend, acquaintance or relative. 11.4%
4. Don’t know, refused, no answer. 11.1%
5. Information accessed by corrupt employee. 8.7%
6. Stolen paper mail or fraudulent change of address. 8.0%
7. Obtained some other way. 7.4%
8. Computer spyware. 5.2%
9. Information stolen from garbage. 2.6%
10. Computer viruses and/or hackers. 2.2%
11. Emails sent by criminals posing as legitimate business. 1.7%

* 12.9% attributed to transactions – 10.4% offline transactions, 2.5% online transactions.

In total, when the instances where information was accessed during transactions are subdivided into online and offline transactions, only 11.6% of the information used to perpetrate identity fraud was stolen from computers.

Of this more than half was obtained by the use of spyware, viruses or hacking – the risk of which can be greatly reduced by installing the appropriate protection software and ensuring that this is kept up to date.

Not only did the survey reveal that the internet was not a major source of illegally obtained personal information, but it was also found that those fraud victims who checked their financial records using the internet, ATM machines or other electronic methods suffered financial losses which were, on average, 8 times lower than those of victims who used traditional paper statements to monitor their accounts. This significant reduction was attributed to the fact that the fraud was discovered more quickly thanks to “real time” monitoring.

Of course, that’s certainly not to imply that you shouldn’t exercise caution when using the internet or take care to protect the sensitive information which you have stored in your PC’s memory. However, as long as you take sensible precautions – install virus, firewall and spyware protection, and keep updated the internet could actually help you to avoid identity fraud.

Safe Internet Blog id fraud, id theft, identity fraud, identity theft

When it comes down to your financial future, there is nothing more important then protecting yourself from identity fraud. This is because is it your job and your job only to prevent identity theft in order to make sure that everything goes smoothly for you in the future. Identity fraud is nothing to take lightly as it can turn a persons world completely upside down in a matter of moments. There have been cases where credit cards, car loans, and even mortgage loans have been taken out in a persons name through identity fraud.

Sometimes the people doing the identity fraud can be caught and other times they are not. But the faster you notice something is wrong and take action, the better the chances will be that the thief gets caught. There is never a reason that you should not take action, even if you know the person who is using your credit. Never let the wrong doings of someone else cause you financial trouble. Your future is completely in your hands and that is why it is so important that you take identity fraud seriously.

Steps You Should Take

While it may seem like common sense, you should never release your social security number to anyone over the phone. Not only could the person on the other end be taking that information to use it for identity fraud, but also if you are on a cellular phone or a cordless, there could be hundreds of people listening to your social security number. Never keep your social security card in your wallet either as that is just the thing someone who is into identity fraud would love to see. Try to remember to watch your surroundings as well and never leave your wallet or purse out of sight so that it is not stolen from you.

Keep an eye out on your credit report so that you can quickly identify any changes on your report that you had nothing to do with. Identity fraud will first show signs on your credit report and it is these agencies that basically control your future and whether or not you will ever get credit or another job again. And that is another thing to consider, identity fraud cannot only affect your credit rating but it can control whether or not you get a job. This is because a lot of companies are now doing credit report searches on potential employees before hiring them.

Go here for more about Identity Theft Facts and Avoid Identity Theft

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