Homeowners pick up the pieces of £800k fraud
A fraudster has secured hundreds of thousands of pounds of illegal funds by cloning the identity of an unsuspecting homeowner and obtaining credit against their identity.
Posing as the homeowner of a property for sale, the sophisticated fraud secured an £800,000 mortgage against the property which was advanced to a bank account which had been opened in almost exactly the same name as a legitimate law firm.
In order to perpetrate the deception the fraudster would have needed to understand the conveyancing process in order to have created the fake account and mortgage application.
The fraudster then continued to attempt to raise further credit through a series of loan and bridging application made in the name of the homeowners, known as Mr D and Mrs D.
Throughout the spree Mr and Mrs D remained completely unaware of any activity until he was contacted by a mortgage broker James Lennon of Tapton Capital through social media to confirm he had in fact requested a £500,000 bridging loan which brought the fraud to light.
Mr D and Mrs D then started to uncover the details of the deception and established that the defrauded lender had in fact reported the fraud to Action Fraud and began its own efforts to recover the money without informing Mr and Mrs D.
In a bizarre twist, despite reporting the identity theft to the police, Mr and Mrs D were told that no crime had been committed
According to Action Fraud identity theft is not a police recordable crime. It is only recordable by those who have been defrauded as a result of the identity theft, which in this case in the lender.
Today’s Conveyancer continues to report on the progress being made around work to create a more robust process of verifying identity. In this case the fraudster managed to provide a verified identity document which appeared to have been stamped by a legitimate law firm.
They deny any knowledge of the verification stating
“Our firm did NOT validate this fake passport. A fraudster has impersonated… a solicitor in our firm, to steal money from a bridging finance lender. He’s managed to open a bank account in (our name) and seems to have knowledge of conveyancing work.”
What is clear in this case is that the fraud has been achieved by using physical documentation for the mostpart to achieve the identity theft.
The group previously known at the Digital Identity Group is working with estate agents, lenders, membership groups, current electronic ID providers, and the Department for Digital, Culture, Media & Sport (DCMS) to create a “trust framework” against which an industry standard for electronic ID can be established.
The Land Registry have also launched their Digital Identity Standard which provides a step-by-step list of requirements for conveyancers’ use of electronic ID services to enable digital verification of client’s identity. HM Land Registry would not seek recourse against conveyancers who comply with the standard in the event their client was not who they claimed to be offering a ‘Safe Harbour’ for those conveyancers who meet the requirements.