How to Avoid a Property Scam

Given the large amounts of money that are involved, the property business is a frequent target of scams and fraudulent schemes. While scammers have come up with numerous creative ways to cheat unsuspecting individuals out of their money, there are several ways you can fight back, the most important being awareness and education, which will then help you avoid property scams. The most common scam is identity fraud, which can be dealt with in an effective manner, if you know how to go about it.

Identity fraud

These are usually carried out by a fraudster who is pretending to be the owner of a property. Then, in order to profit from the property, the fake owner either sells the property to an unsuspecting third party, or obtains mortgage financing from an unknowing lender. Once s/he has the money, the “owner” vanishes without a trace, leaving the third party to deal with the losses they have incurred. The fraudster pulls this off by using fake or forged documents, by inventing a fake name for himself/herself which is identical to that of the original owner, and by cleverly persuading the lawyer to skip the process of identification (e.g. s/he might suggest that s/he left her/his wallet in a friend’s car). With less and less emphasis being placed on getting to know your client thoroughly, identify frauds are steadily becoming more common. However, there are a number of ways you can protect yourself, and avoid this sort of scam.

Obtain picture ID

Be persistent about picture identification, and insist on being provided with some ID. If there are more than two people involved in the deal, make sure you request separate picture identification from each. It is essential to conduct an identity check – do not be fooled by any excuses the “owner” might come up with for the purpose of avoiding this step.

Keep copies

Make sure you get a photocopy of the picture identification you are provided, and keep it in your records for future reference, in case the deal goes awry and you find yourself caught up in a scam.

Contact other involved parties if you are still concerned

If you still have concerns and suspect that you are being led into a scam, try to get in touch with the lender, and ask them if they are satisfied as far as the borrower’s identity is concerned.

Keep an eye open for urgency

Watch for signs of urgency – does the “owner” seem in a hurry? Fraudsters will be in a rush to complete the scam as fast as possible in order to avoid detection, so do not allow any owner to rush you into a deal.