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  • Landlords in Distress

    "Scam Awareness Month" starts today - How to protect yourself from property fraud

    Today marks the start of "Scam Awareness Month".

    Unfortunately, due to being almost completely unregulated, (not to mention the large transactional values involved), the property and "wealth creation" industry attract a lot of scammers - some with criminal intent, some just incompetent business people.

    Here are Property Tribes, we unfortunately tend to hear from people AFTER they have been scammed. They are desperate to vent their anger and warn others at the same time.

    However, we would prefer people to find their way to Property Tribes BEFORE they are scammed, as prevention is always better than cure!

    We endeavour to educate on the "method" of these individuals as they may come and go (bankrupt), but their method remains largely the same.

    Back in 2009, I wrote my seminal post "How to avoid becoming property shark bait" and the advice still holds true today.

    The Citizen's Advice Bureau has given some hints and tips on avoiding scams, which I have adapted for the property sector:

    1. “The ones you have to watch”

    “He seemed so friendly and interested in me" is a common comment by many people who have been scammed. "He even introduced me to his family and friends".

    Many scammers engage in a process known to scam fighters as social engineering: the art of emotionally manipulating someone so that they relax the protective field of caution that keeps them in possession of their valuables. That and picking up snippets of information that might prove useful such as if they have large amounts of cash to "invest". Wink

    2. Beware calls and emails where a begging bowl is out

    In property, there are many emails doing the rounds asking for loans and offering suspiciously high and unrealistic rates of returns.

    Ben Rogers is the most recent case of a high profile property guru who borrowed money and many innocent people lent him money and did not receive their interest payments or capital. He subsequently was made bankrupt. Whether he was a con man or not is immaterial to the individuals who lost money. They should have become suspicious with the high rates of returns he was offering and the fact that he was constantly asking for money and emailing his list to solicit loans.

    Successful business people can borrow money from banks and private investors at far cheaper rates than the ones we see being offered. Ask yourself why they do not have access to these channels of finance? Maybe all is not as it seems?

    3. Facebook is a major originator of property-related scams

    According to Hoax-Slayer, scammers are increasingly using Facebook as a means of connecting with potential victims.

    Be extra vigilant on FaceBook as many property scams originate there as newbies are lured in with promises of "get rich quick". It is also not searchable by google, meaning that scammers and unscrupulous operators can operate below the radar.

    8 signs you are about to become a victim of a property investment scam

    5 signs you might need to run a mile

    4. If it sounds too good to be true. It is. Every time. Without fail. No exceptions.

    Such a simple way to keep yourself scam-free! Don't buy a ticket to see a Unicorn, or think that someone is going to sell you the six numbers to the lottery for a few thousand £££'s. They are not.

    Don't believe in people selling you a dream and telling you to stay away from neg heads and nay sayers. They may be achieving THEIR dream of riches at your expense, ignorance, and lack of due diligence. Seek multiple inputs from multiple sources, look for agenda and bias, and build your own picture. Believing someone else without checking on it is a recipe for disaster in property!

    5. Watch out for identity fraud in property - it's on the increase!

    Our colleagues at Anthony Gold Solicitors have produced a blog on this. Excerpt:

    Over the past 5 years there has been an alarming increase in identity fraud relating to property in London. One such scenario is when property fraudsters identify a rental property and move in as tenants under false identities. They then procure a false identity for the owner and sell the property.

    Some of the false identity documents are so good that they are very hard to detect as fraudulent. The conveyancing solicitors are duped and the sale proceeds to completion.

    However there are some signs that should put innocent purchasers on guard.

    I start with the end destination for the sale money. Fraudsters need to launder the stolen money. Sales that require sales monies to go to an account abroad are high risk. If a buyer is based abroad more caution should be applied.

    Secondly, if the seller has pulled out of a transaction before – perhaps on detailed enquiries being raised - again the buyer should proceed with caution

    Thirdly, if the sale is via an internet estate agent, the agent is less likely to have contact with the person purportedly selling, hence again alarms bells might ring.

    Fourthly, if a property is on for below market price – or the seller looking for a quick sale – the deal might be too good to be true.

    Fifthly, if the property is tenanted, but offered with vacant possession, it might be best to ask to speak to the letting agency and visit with the tenants in situ.

    Finally, rental properties in a single name without a mortgage are particularly vulnerable.

    In order to safeguard property yourself from a fraudulent transfer of your own property, it is recommended that your address registered at the Land Registry, is up to date. The Land Registry should write to that address to confirm the transaction is a good one prior to registration. If you have moved - perhaps the property was once your home and you are now renting it out - hence the address given is the property itself - you may not receive that notice.

    Protect your property from fraud with Land Registry alerts

    Full/source story

    6. NEVER, EVER pay large fees upfront for any product, service, or deal

    Only pay for results, not promises. If large fees are asked for upfront, then immediately be concerned and do extra due diligence on the individual or company.

    7. Don’t be rushed, don’t be hushed

    It’s why we all have to be aware. Stay alert enough to question. Keep ourselves informed of the latest techniques the latest scams. Learn our lessons, share them. Take our time. Listen to our "gut" instinct warning us.

    Don’t be rushed. Special offers, only one place left, buy today to save ££££'s, buy today and get extras ... are all marketing ploys and are often associated with scams. Do not rush into anything. There is no need. Take time to do due diligence and reflect, and don't get caught up in "ra ra" and hype.

    It’s a humiliating, messy business being scammed. But you learn from it. And part of the process involves putting your experience out there loud and clear in the shared awareness of others.

    What you can learn from others who have been scammed or lost money in property:

    Our "Investors in Distress" category has many of their stories and warnings.

    In order to avoid scams, you must become an expert in due diligence. This will save you money and heartache and can protect you from devastating financial loss.

    5 minute due diligence regime before opening your check book

    Due diligence applies to lettings agents, property deals, deal sourcers, tenants, and any company you are thinking of entering into a financial transaction with.

    Here's a reprise of our due diligence guide from industry experts:





    Please play your part in keeping the private rented sector and property industry safe by sharing this post on your twitter and Facebook timelines!
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    A helpful post to stop people being scammed out of their pension pot.

    One in five over 50s may have been targeted by scammers looking to trick people out of their savings, a new survey reveals.

    The YouGov study commissioned by Retirement Advantage found that 17% of over 50s and 20% of over 55s have been approached by a company offering to help them access their pension early, for instance through legal loopholes or a one-off investment opportunity.

    The most common method of contact was by telephone (50%), followed by post (24%) and then online (23%).

    Here are five signs that should set off alarm bells:

    1. An offer to help you access your pension savings before age 55. It is only possible to do this in rare situations, for instance if you are very ill, so be careful and always check with your pension provider.

    2. A recommendation to take a large amount of money, or your whole pension pot, in a lump sum and invest it. There are significant tax implications if you take lots of your savings in one go, so check the tax position before you make any decisions.

    3. Warnings that the deal is limited and you must act now. Choosing the right retirement income product is a big decision and shouldn’t be done quickly or under pressure.

    4. An encouragement not to get professional financial advice or talk to Pension Wise. An adviser would be able to explain the rules and tax implications of different options and help you make the best choices for your personal circumstances, so be very suspicious if this is discouraged.

    5. Contact by somebody who is not on the Financial Conduct Authority (FCA) Register. The Register is a public record of all the regulated firms and individuals in the financial services industry, including retirement income providers and investment companies.

    Source/full story
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    [Image: 4995468760_6be86655d4_t.jpg]
    general operations director (aka Colonel Nicaffi) - propertytribes.com


    A great post; In the spirit of "Scam Awareness Month" I came across something rather worrying! that is FAKE MORTGAGE BROKERS!

    First off; best to outline you can spot a real mortgage broker by typing the company name into the FCA register as you can see for Bespoke Finance FCA- it lists the telephone and website too.

    There has been issues with clone'ing!

    The FCA authorisation number should be listed on the footer of the brokers website and emails. There is an issue with BTL Brokers (being unregulated) but most will have the FCA authorisation anyway.

    The issues are wide ranging from data protection to the one I stumbled across - a fake broker charging "Valuation Fees".

    [Image: fI6cwom.jpg]
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    THIS PROPERTY TRIBES ACCOUNT IS NO LONGER USED.
    DO NOT SEND PRIVATE MESSAGES.

    --- MORE INFO HERE ---

    YOU CAN REACH ME AT BESPOKE FINANCE or MY TEAM AT 08009202001


    Did you know? Only 5% of scams get reported.

    If you know of a scam, report it to Action Fraud.

    The FCA has a section of its website dedicated to avoiding scams called ScamSmart.. There is a warning list of current scams which you can check if you have any concerns.

    Money Saving Expert has produced a new guide:

    30 ways to stop scams
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    More advice for spotting scams from Citizen's Advice Bureau:

    A scammer may:

    >contact you out of the blue

    >make promises that sound too good to be true - if something sounds too good to be true it probably is

    >ask you to pay for something up-front - for example, they'll ask you to pay a fee before you can claim a prize

    >ask you to make a quick decision by saying things like ‘if you don’t act now you’ll miss out’. This puts you under pressure and doesn’t give you time to think

    >be over-familiar and over-friendly with you

    >tell you an offer has to be kept secret

    >ask for your bank account details. Never give your bank details to people you don’t know, especially people you meet online

    >give a mobile number or PO Box number as the contact for their company- these are easy to close and difficult to trace. It may be a sign that the company doesn’t exist or isn't legitimate. Check out the company's details with Companies House or look on the internet for more details about them.

    >If you think something might be a scam, don’t reply - then throw it away, delete it or hang up and get further advice.

    Further advice
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    Great topic and theme of the month!

    Here's a few more to add to the list...

    1. 'Catfish' across social media platforms - In addition to Facebook, other social media is being used to target people and scam them. Admittedly not property, but my nephew was contacted via Instagram for the trading deal of a lifetime...in the too good to be true category, but he was provided with plausible-looking testimonials, saw the profile appeared to be real and had the friendly chat up chat from the very nice young lady at the end of the chat box. I did a couple of image searches and it showed that this particular lady could be any number of people, ranging from a model in Sweden on Twitter, to an apparently oversexed lady on Instagram, to the high-rolling London trader that she claimed to be in Instagram!

    Top Tip: use Google image search to verify people...and make sure the image is not attached to lots of different websites and social media profiles

    2. Overseas investments - unregulated, away from our prying eyes and full of middle men taking fees and running for the hills. I have had some connection with a couple of overseas property deals and both had an element of scam about them. Harlequin is an infamous case for example.

    Top tips: check that any professional advisor is FCA registered, be very, very wary about advice to transfer pension...especially into overseas unregulated investments, visit the location, meet all the people involved and don't use solicitors and the such recommended by the introducer, find your own

    3. Letting agents skimming - The Foxtons case recently brought this into mainstream focus, but it seems to be quite common (although not by any means with all agents). Basically, this where a letting agent charges additional fees, whether disclosed or not, to the landlord for arranging works, kickback commissions from trades and suppliers and hidden markups for works costs deducted...in some cases works may not have even been required and others may not have taken place at all.

    Top tip: I wrote more about this topic and how to spot the issues and overcome them in this blog

    Don't get bitten!

    Best
    Richard
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    Richard W J Brown
    Property investor, industry commentator & knowledge sharer
    http://www.thepropertyvoice.net
    Also now an author

    Excellent additions RIchard, thank you so much.

    Great tip about searching images too. Smile
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    Cut down on unwanted phone calls by registering your number with the Telephone Preference Service Tel: 0845 070 0707
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    People aged over 55 could be four times more likely than the general population to become victims of a telephone scam where fraudsters pose as a bank or the police, according to figures from the financial ombudsman.

    The Financial Ombudsman Service (FOS) reviewed 185 phone scam cases involving "vishing" and "no hang up" frauds. It found that four out of five of the victims conned out of their cash were aged over 55 years old. One in five victims was aged over 75 years old.

    The cases involved total losses of up to £4.3m. One in five people had lost between £20,000 and £49,999 and some victims had lost more than £100,000.

    The ombudsman service is urging people visiting relatives over the summer to highlight the risks and help prevent such scams from happening.

    Vishing scams involve criminals tricking people out of their savings by pretending to be from a legitimate body such as their bank or the police. The "no hang up" scam is a type of vishing, where fraudsters persuade consumers that their account is at immediate risk and tell them that they need to move or withdraw their money urgently, using technical tricks on the phone line to add to the plausibility of the scam.

    Sometimes, fraudsters stay on the phone line after speaking to the victim, so that when the victim puts the phone down and then tries to call their bank, they will still be speaking to the fraudster.

    Full/source story
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    Citizen's Advice have listed the most common scams that you need to be aware of.

    Find out more >>> here.
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    Scams are schemes to con you out of your money, they can arrive by post, phone call, text message or email, or from someone coming to your home. Fake lotteries, bogus psychic predictions, get-rich-quick investments, people offering an unrealistic return to loan money off you, and 'miracle' health cures are just some of the tricks that scammers try.

    We can all help educate family, friends, and vulnerable people in society about scams.

    If you wish to report a scam please call the Citizens Advice Consumer helpline on 03454 04 05 06
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