Beware of binary options trading schemes

We have seen an increase in the number of enquiries from clients relating to losses from binary option trading schemes.

A binary option, or fixed odds betting is a financial option where the payoff is either a fixed amount or nothing at all. An example would be to bet on whether a particular share price will be above or below a certain amount. Investors suggest they can gain high returns from small amounts but this often leaves clients losing large sums of money.

Figures from Action Fraud show the amount lost to binary options trading increased from £6,200 in 2012, to £27m in 2017. Binary options scamming has been described by the consumer group Which? as “Britain’s biggest investment con”. Evidence of bad practice across the board has been identified with high pressure sales tactics and unfair terms and conditions being used.

These schemes are increasingly being used by fraudsters using illegitimate companies to target vulnerable victims through cold-calling and pop up adverts. These companies are often registered in a foreign jurisdiction which makes them harder to trace and pursue. It is therefore very difficult to recover losses suffered unless there has been a UK based professional who facilitated the loss.

From January 2018, the Financial Conduct Authority will take over the regulation of binary options trading.  Hopefully, this will increase the regulation of binary options companies and reduce the amount that has been lost by clients.

If you require any further information or any assistance, please contact the commercial team at Anthony Gold.

Beware of Pension Reviews

Your pension is probably one of your  largest assets and the result of a lifetime’s hard work and saving.  It is also the prefect target for fraudsters.

One way in which pensions can be targeted is through what is known as a “Pension Review Fraud” which is designed to persuade the victim to move money from a pension pot into an investment which the victim is told offers much higher rates of return

How does a Pension Review Fraud work?

Imagine the scenario, you are sitting at home and receive a cold call from somebody offering  you a free pension review. They either claim to be FCA authorised or they say that they do not need to be FCA authorised as they are not giving you any advice themselves. They produce impressive brochures and direct you to a professional looking website.

Having gained your confidence they tell you that they have reviewed your pension and that it could be doing much better. They claim to know of a new unusual investment that promises guaranteed returns and will allow you to take a cash sum from your pension now. They might warn you that your current pension provider will do whatever it can to hang on to your pension pot by claiming that “due-diligence is needed”.

It might be many years before you realise that in fact the “unusual investment” never existed and that you have been defrauded out of your life savings.

What can you do?

There are simple steps that you can take to reduce your risk of being a victim:

  1. Reject unsolicited calls or emails; legitimate companies should not contact you out of the blue.
  2. If you have been contacted, check the FCA register or FCA warning list here.
  3. If you are still thinking about investing, seek independent financial advice from an FCA regulated firm.

If you have been a victim of a fraud contact the Anthony Gold fraud team on 020 7940 4060.

If it’s too good to be true…

Recently we have seen a significant rise in clients looking to recoup a bad investment. Typically the bad investment is related to property.

One such example is  a case in which I acted for over 100 people who had been scammed into entering a partnership with various property Companies which just happened to all be under the control of the same person. The clients were told that their money would be used to buy run down properties which would then be refurbished and sold for a large profit. The clients would get half of the profit. The projected profits were eyewatering and if achieved would have made the clients a lot of money.

In fact the properties were already owned by the Companies, were subject to existing mortgages and the Companies had no intention of refurbishing them. Instead they ran off with the money before going into liquidation.

The solicitors who acted for the clients had been appointed by the property Companies and fortunately I was able to agree terms with the solicitors insurers which my clients were happy to accept.

There are some golden rules to follow before ever investing money in a property scheme:

1. Instruct your own solicitor not the solicitor instructed by the scheme organiser. Your solicitor will check out the title and make sure you have a written agreement that protects you.

2. Go and visit the property. Make sure it exists and check its condition – if necessary get your own survey and valuation.

3. Check out the joint venture partner – look on google; social media and forums and make sure no one else has already been stung or is complaining about a similar investment.

The SRA has issued some helpful guidance which is worth a read.

Property Fraud and Executors

As set out in the recent article in the Financial Times there has been a recent increase in identity thefts involving properties.  In that article, Ms Beth Holden, a member of our team here at Anthony Gold, explains how fraudsters target empty or rented properties.

One of the case studies referred to in that article involved a probate property. It was only long after the executor was appointed that the fraud came to light.

What then are the responsibilities of an executor to safeguard the estate assets in these circumstances?  Many people agree to become an executor, without understanding the full responsibilities involved. Furthermore, although executors’ powers are limited until the grant is in place, many do not understand that the responsibility starts on the death. As such they are often not in a great hurry to secure the property. This is when fraudsters might target probate property.

An executor will have made enquiries as to the estate assets before the grant of probate, in preparing the IHT forms. Part of that process should be looking to secure the estate property. Executors should make enquiries as to who is occupying the property. If the property is empty regular visits should be arranged. If the property is rented, then enquiries should be made of the tenants.

In terms of protecting a property, many executors will have the property transferred into their own name as soon as possible. The first step, however, would be to send in the death certificate and request that the death is registered on the system. Executors would also be wise to sign up to the free alert service offered by the Land Registry. In any event, the address of the proprietor should be updated from that of the deceased.

If the above precautions are not in place and the property is transferred to a bona fide purchaser without notice of the fraud, it would be necessary to apply to have the register rectified. This is a complex and lengthy process, which necessitates legal representation.

At Anthony Gold, we run regular seminars discussing the latest issues affecting executors.  The seminars are free of charge. If our programme of seminars is of interest, please follow this link here where you will see the latest topic.

Letting agent scams

David Smith gives advice on what you can do if you have a rogue Lettings Agent.

Landlords are being put at risk of criminal prosecution – and the prospect of unlimited fines – by tenants who are intent on fraud, a leading housing solicitor has revealed.

David Smith said he has seen a ‘huge increase’ in civil and criminal cases where residential landlords are being held responsible for the fraudulent actions of their tenants.

“The number and nature of so-called ‘rental frauds’ have grown massively over the fifteen years I’ve been working in this field”, Smith said.

“Local authorities and superior landlords are increasingly likely to take legal action against landlords for what are effectively the misdeeds of their tenants.

“The impact on residential landlords can be devastating. They can have to pay thousands of pounds in legal fees and fines – not to mention that, in certain circumstances, some may be left with criminal records”.

According to Smith, a partner Anthony Gold solicitors, the boom in the number of actions brought against landlords has mainly been driven by a rise in sub-letting.

“If your property is sublet, then you may not know the terms under which this is done, who is living in your property, nor what the tenants are doing. Sub-letting marks the beginning of a landlord’s legal issues.”

Smith outlined the three main ways in which residential landlords are finding themselves in court:

– Action by a superior landlord. “This is usually where a neighbour complains to the property’s freeholder, perhaps about noise or disturbance. The first the landlord knows about a problem is when he receives legal notice about a breach of freehold conditions.”

– Local authority action against London short lets. “The so-called ‘Airbnb’ problem. When a local authority writes to let you know that your property has been rented out on a holiday short let platform for more than 90 days a year”.

– Environmental Health action against HMOs. “Where your property has been turned, without your knowledge, into a House of Multiple Occupancy – something for which you need specific planning permission”

“These are all technically frauds. Landlords are being put in a position where they are being held responsible for breaches of agreements through no fault of their own” Smith said.

All of these frauds come with a cost.

“Just receiving a letter from a superior landlord will typically cost between £1,000 and £2,000.

“Breaching the law on HMO can be very serious. It’s a so-called strict liability offence, which means that if the breach happened, there are limited possible defences. If found guilty the landlord can be issued with an unlimited fine. They would also be left with a criminal record.”

David Smith, who wrote one of the first legal books on HMOs, said rental fraud has only really emerged as a significant problem for landlords in the past three years.

“It’s taken a while, since the introduction of the 2004 Housing Act, for local authorities to realise the extent of their powers under the Act”, he said.

“Over the past three years I’ve seen the number of prosecutions rise enormously.”

This video has been recorded for Property Fraud Awareness Week 2017 in partnership with Property Tribes. If you think you have been a victim of property fraud please contact us 0207 940 4000.

Property Fraud – How to protect your property from fraudsters

How much of a threat is property fraud?

Property fraud in the UK is on the increase. You might not have even thought about it – the idea of a tenant selling your property right under your nose might not be something which has even occurred to you as a landlord. However, a recent survey showed that an estimated 6.5% of adults in England and Wales had been the victim of fraud in the previous 12 months. It is also a changing phenomenon – cyber-fraud is becoming ever more common as we become more dependent on computers and the internet in every area of our professional and personal lives. As a result, we all need to be more aware of the threat of fraud.

Property in the UK is increasingly valuable and is most people’s largest asset. This is particularly true in the buy-to-let sector, which is seeing a huge growth: landlords earned a combined £14.2bn in net income from rental properties between 2013-2014, and these figures have continued to grow. With sums like this involved, it is no surprise that the sector has drawn the attention of criminals seeking to profit from mistakes made by landlords.

The issue of fraud surrounding property has not generally been widely publicised until fairly recent cases hit the media. Several high-profile cases where properties have been sold by tenants posing as the owner have caught the attention of the press, acting as a warning to owners of property that this kind of crime is no longer a rarity.

One such landlord only became aware that he had fallen victim to property fraudsters after seeing his own property advertised for sale on a property website. He was lucky to spot the advert but others have been less fortunate.

Many landlords may be at risk of falling victim to fraudsters without even realising and as with all sorts of crime it can be very easy to assume that these things won’t happen to you. As such, it is important to be aware what the risk factors are. If this does happen it is likely to cost a great deal of money to get the situation resolved and require drawn out court proceedings. Therefore it is best to ensure that you are not caught out in the first place.

What are the risk factors for property fraud?

As with most kinds of fraud, some landlords are likely to be seen as ‘easy prey’ for fraudsters and swindlers. Generally, a healthy dose of common sense should keep you safe, but it is worth keeping in mind if you are particularly at risk.

Landlords who are most at risk of fraud include those who rent out their properties and live overseas. Living overseas away from your property naturally makes it harder to keep an eye on it, and to keep tabs on correspondence regarding it, meaning you might miss something suspicious or important.

Leaving your property empty can also make you more vulnerable to property fraud, as it is much easier for a fraudster to pretend a property is theirs if there is nobody else living there, or keeping an eye on the post.

Properties which are not mortgaged or registered with the Land Registry are also at risk, although these are increasingly uncommon.

Finally, most cases of property fraud are facilitated by identity theft, a crime which rose by a massive 57% last year. This is in no small part due to the increasing ease of access to people’s personal information online, be it via your social media profiles or through hackers stealing personal information from company databases and selling them to the highest bidder on the dark web. More conventional methods of identity theft still pose a high risk, such as the changing of names via deed poll and use of fake ID. If you know or suspect that you have been a victim of identity theft, you are far more likely to be at risk of losing your property to fraudsters.

How do I protect my property from fraud?

Fortunately, it is generally quite easy to safeguard your property against these scams:

  • Stay vigilant for identity fraud – Whilst it may seem obvious, you should take care when it comes to your identity and the information available about you – or your property – online. Take any suspicious letters or emails seriously.
  • Keep an eye on the Land Registry – It is simple and inexpensive to check your property on the register. Keep your details on the register up to date and make sure that the information on the register is current and correct – it can be easy to forget to change your contact details if you move house, and anyone can look at what address is associated with the property on the Land Registry. It is easy to make mistakes, and many landlords fail to register their personal property address correctly. It is all too common to register the owner’s address of the rental property as the rental property itself making fraud very easy indeed for an unscrupulous tenant.
  • Sign up for property alerts – The Land Registry has introduced a new, easy, and free way to keep tabs on your properties. You can sign up to receive email alerts with the Property Alert Service whenever somebody interacts with your property on the register. This includes searches and applications made against the property, meaning that you know as soon as something suspicious takes place. The system is free to use and lets you monitor up to 10 properties. All landlords should have one or more alerts set up on their property.
  • Restrict changes to your title – The Land Registry allows you to place a restriction on your title, meaning that nobody can register a sale or mortgage on your property without your signed certification from a solicitor or conveyancer. If you know you are particularly at risk of property and identity fraud, this could be a really important first step. Again the Land Registry does not charge for this restriction. While you can do this yourself you may wish to enlist the services of a conveyancing solicitor – we are able to offer this service at Anthony Gold.

It may seem like common sense, but being aware of the risks and following these simple steps can ensure that you never find yourself in the unfortunate situation of falling victim to property fraud.

Rent to rent Scams

David Smith explains what rent to rent is and what you should consider when making a rent to rent deal.

Property professionals are being lured into paying for training courses which advise investing in legally-dubious rental schemes.

Housing solicitor David Smith has warned investors to be wary of anyone advocating so-called ‘rent for rent’ schemes.

These schemes – by which an investor rents a property, then sublets it at a profit – are fraught with legal problems, Smith said.

They can result in investors losing money and finding themselves in court.

“The people running these courses often give the impression that they are themselves making a fortune from their ‘rent to rent’ investments”, Smith said.

“But often their money – if they’re making any – actually only comes from running the courses.

“They may not be experts at all – and as a result the investment advice offered can be very bad indeed.

“It can result in people facing huge fines, and potentially putting themselves at risk of prosecution.”

Low savings rates coupled with recent changes to tax policy have resulted in many would-be landlords seeking news ways to earn money from property.

Self-styled ‘property gurus’ have sought to tap into this market by offering courses on building up a ‘rent to rent’ property portfolio.

Smith, a specialist in residential landlord and tenant law at Anthony Gold solicitors, advised caution of these schemes.

“The people running these courses often seem to gloss over the relevant property law”, Smith said.

“I’ve seen courses where the people running them make no mention of the 90 day limit on short term lets in London.

“Ignoring this can land any landlord in court.

“They often also suggest using so-called ‘licences’ instead of tenancy agreements, and claim  that by using a licence a landlord can force eviction without first going to court.

“But that’s just not true. The courts have repeatedly held that ‘licences’ are not substantially different from tenancy agreements, and you still need to go to court to get an eviction order.”

Smith pointed out that recent legislative changes mean landlords risk now even more if they ignore the rules.

The Housing and Planning Act 2016, which came into force in April 2017, allows tenants to sue, and get financial compensation for, any unlawful eviction, Smith said.

“I would be very wary about ‘rent for rent. I liken these schemes to those old ‘buy my book and you can be as wealthy as me’ advertisements in the newspapers.

“Too often these people seem to be trying to make money by telling others to do something about which they know very little indeed.”

This video has been recorded for Property Fraud Awareness Week 2017 in partnership with Property Tribes. If you think you have been a victim of property fraud please contact us 0207 940 4000.

Property investment & mentoring scams

Do you think you have been involved in a property fraud scam? Clifford Tibber explains the typical signs of a scam and explains how not to get caught out.

Older people who are either retired or are approaching retirement are especially vulnerable to property fraud, industry experts have warned.

People aged 55 and over are far more likely than younger generations to be lured into fraudulent property investments by conmen promising astronomical returns.

They are being targeted primarily because they are more likely than the young to have ready access to investment capital.

But the fraudsters also recognise that some older people are more naive about internet scams – and more ready to believe what they read online.

Property lawyer Clifford Tibber, of Anthony Gold solicitors, said: “It can be an absolutely tragic situation.

“Older people look at their savings, or perhaps their pension statement, and they see they’re earning barely any interest at all.

“They then look online and read about the astronomical rates of return apparently  available in property investments. Sometimes it is 30 or 40 per cent a year.

“Interested, they go along what may be described as an ‘investment course’, but is really a sales pitch. And the guy giving the talk is dynamic and very convincing.

“Many then take out cash from their pensions, and invest the money in property that is supposedly either about to be built or refurbished.

“A year later, however, and nothing has happened. And it never will. The best they can hope for is to get a fraction of their money back.”

Tibber’s warnings are echoed by both the campaigning charity Age UK and the Financial Conduct Authority (FCA)

The FCA found that over 65’s with savings of more than £10,000 are three and a half times more likely to fall victim to investment fraud than the rest of the population.

Age UK has pointed out that older people are “especially at risk” of investment fraud, in part due to financial pressures, but also due to cognitive impairment.

Tibber is currently representing a group of 100 investors who together lost £3 million in an alleged property scam.

He said his is very far from being the only case.

“The sad thing is that this kind of thing is generally easily avoidable.

“The first thing anyone considering investing in property should do is make sure you know exactly who you’re dealing with. At a minimum you should thoroughly check out the company, and the individual your dealing with, online.

“Then you should visit the property. Check it exists. If it’s a new build, then how much of it is already built? If it’s a refurb, is someone living it now? When are they going to leave?

“Finally, I think you should definitely ask a lawyer to look over the documentation. In my experience, most of these scams are quite obvious when you

look at the paperwork.

“In my opinion, it’s a good investment to spend £500 on a lawyer when you’re risking tens of thousands.”

This video has been recorded for Property Fraud Awareness Week 2017 in partnership with Property Tribes. If you think you have been a victim of property fraud please contact us on 0207 940 4000.

The anatomy of a scam

Do you think you have been involved in a property scam and unsure on what to do next? David Wedgwood explains the anatomy of a property scam and what to do next.

This video has been recorded for Property Fraud Awareness Week 2017 in partnership with Property Tribes. If you think you have been a victim of property fraud please contact us 0207 940 4000.