Land Registry Loopholes Lead To Property Fraud

Loopholes in the Land Registry website have allowed criminal gangs to steal £12m in the last two years. They have done this by gaining access to sensitive information about property transactions from the website, using the details they have discovered to launch complex frauds. One of these netted £8m for criminals.

The old system issued title deeds only manually every time a property changed hands, and people had to actually go to the Land Registry office to get details, and they needed permission from the owner. The new system updates the register electronically, enabling details to be downloaded from the website at £3 a go. Criminals can easily access mortgage account details and signatures.

Fraudsters appear to have fooled banks, building societies, solicitors and officials into transferring ownership to them using fake ID and information from the website. Favoured methods are to sell the house and melt away with the proceeds or take out a mortgage and disappear with the cash. As properties are often rented it can take some months before the scam is uncovered. One incident had a tenant  copy the homeowner’s signature to give him power of attorney. The tenant then took out a mortgage for £150,000 paid into a bogus bank account and disappeared with the proceeds. The first thing the owner knew was when he received letters from the building society warning that his property was about to be repossessed.

Tory MP and ex-Cabinet Minister Peter Lilley has called for signatures to be removed from documents kept online. One of his constituents was a victim of the scam.

It can take months of effort fending off debt collectors and struggling to convince people that have been victims of a fraud before they are eventually believed and compensated.

Seven people have been charged by West Midlands Police over a suspected £1.3m fraud using Land Registry papers. The Land Registry is in discussion with the Council of Mortgage Lenders about tighter security.