Fraudsters are impersonating homeowners who have recently died, or solicitors, in order to steal money in mortgage transactions, new research shows.
Cases are increasing of thieves using the identities of people who have just died to make mortgage applications to lenders, Experian said.
More commonly, fraudsters mimic solicitors to trick buyers into putting a deposit into the thieves’ account.
This money, usually large sums, is rarely refunded by banks.
The average loss to this fraud across England and Wales, according to the City of London Police fraud investigators, is £112,310.
The Conveyancing Association, the trade body for the industry, said: “Customers have lost tens of thousands of pounds plus their potential new home as a result of this fraud.”
It has launched a new scheme and guide aiming to reduce property buyers’ exposure to this kind of fraud.
In the impersonation fraud, con-artists find details of people who have just died and use their identity to make mortgage applications.
They then use a rogue or fake solicitor to receive the funds, which are then cashed in.
The type of fraud in which a deposit is tricked out of a buyer is more of a threat to those involved in a property purchase.
In these cases, fraudsters are on the lookout for people who are buying or selling a home. They then intercept emails between those people and their solicitors.
The fraudster then sends an email claiming that a deposit is due and gives bank details for the money to be transferred. This money quickly disappears from this account, leaving victims out of pocket.
“Because of the values involved, the impact on people’s lives can be devastating,” said Nick Mothershaw, fraud expert at Experian.
“Large payments have been diverted and fraudsters have disappeared with the money. We’d urge anyone who has fallen victim to these kinds of scams to contact Action Fraud.”
Suggestions from the Conveyancing Association include sending small test payments, or secure communication to allow buyers to cross-check bank account details.
Experian, which collects data on detected fraud, said that identity theft in mortgage fraud was rising, although mortgage fraud as a whole – including those who lie about their income in home loan applications – fell slightly in the first three months of the year compared to the first quarter of 2015.
Overall, current accounts are the most common target for fraudulent applications. Experian data suggested 126 per 10,000 applications were fraudulent in the first three months of the year compared with 81 in the same period last year.
“Fraudsters are not going to stop looking for new and evolving ways to scam people,” Mr Mothershaw said.