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Article > Property Title Fraud Costs Land Registry £26 Million In Compensation

Article kindly provided by Mike Clarke


The Land Registry is the UK Government department that records Land & Property ownership in England and Wales. Since 2006 it has been possible to obtain land certificates online, since then there has been a dramatic upsurge in criminals taking out mortgages on property they do not own, leaving the real owners thousands of pounds in debt. This fraudulent activity is known as “Property Title Theft” and has resulted in The Land Registry paying out more than £26 Million pounds (GBP) since 2006 compensating victims of recurring property fraud.

In 2010 The Land Registry paid out compensation for frauds of £4.51 Million pounds (GBP) the second-highest loss on record, as well as costs of a further £440,000, according to the department's annual report. There were 53 cases of the fraud compensated in 2009/10, down from 62 incidents in 2008/09 when the loss totalled £4.23 Million pounds (GBP) with costs of £815,000. Title Theft expert Patrick McCloy, Director of Gatekeeper Protection, said: "Payouts may rise exponentially as victims often do not know they have been victims of fraud until they come to sell their property, which may be many years later. As such, it is likely that victims are 'building up' and gradually more and more are becoming aware of the problem and discovering they are victims."

The compensation figures, which relate to all frauds but much of which are believed to relate to title theft, have been growing steadily each year. A spokesman for The Land Registry said: "Fraud has grown generally in the financial sector in recent years and there has been a growth in identity theft – almost two Million people are affected by ID fraud every year. But we believe the majority of property frauds are perpetrated before registration: for example by impersonating the registered proprietor and obtaining a mortgage, a transaction which Land Registry would have no involvement with until after the money had been forwarded by the lender and the fraud had been successfully completed."

Prior to 2003, the Registry used watermarked land certificates to prove a person owned a property. These were abolished as records went paperless and were available online to the public in 2006. So these days, all that is needed to sell or remortgage a property is an identity and an address: so if the registered owner is one Joe Bloggs, then anyone with the name Joe Bloggs can deal with the property.
Fraud experts say it is all too easy for a potential imposter to adopt a new name, address or even a complete identity.

Buy-To-Let properties without a mortgage are most at risk, fraudsters are targeting Private Rental Sector landlords because of the ease of obtaining the relevant information. Dishonest tenants are able to intercept the post intended for the owner of the property, often containing enough personal information to allow a fake mortgage application without the real owner being any wiser.

The Registry has previously publicly said: "We do not believe that abolishing certificates has caused more fraud." However, it appears that in fact the Government department has been avoiding publicly addressing the issue of land certificates, according to internal Land Registry emails, released under the Freedom of Information Act (2000). The content of the confidential emails reveal that the department is aware that questions on the subject could lead to unwanted accusations of whether the abolition of watermarked certificates has contributed to registration fraud itself. Obviously someone somewhere has finally realised that making things easier for the administration staff has left the door open for fraud to occur, but they are not the direct victim, so it isn’t really their problem!

According to the Land Registry’s own Public Guide document “How To Safeguard Against Property Fraud,” anyone owning an interest in property can be the victim of property fraud, but the Land Registry think that there are some situations where this is even more likely to happen, such as:

• Where a relationship breaks down
• Where a property is empty or is a buy to let rental property
• Where the property owner is abroad or absent
• Where the property owner is infirm or in a home

The guide advises that…”The Land Registry, professional conveyancers and mortgage lenders all have safeguards in place to minimise the risk of a fraud being successful…” and recommends that property owners do the following

• Register the title
• Keep your name and address on the register up to date
• Have three addresses for service on the register
• Put a restriction on your title

Your Identity And Your Property Are Your Assets – Protect Them!



About the Author

Mike Clarke

Mike is the director of MyProperty He has been investing since 2004 and owns property across the North West and the North East


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