An identity fraud in which lasting power of attorney was used in an attempt to steal a flat has highlighted the pressure on conveyancers to perform effective Know Your Customer (KYC) checks, according to the managing director of anti-money laundering specialist, SmartSearch.
The BBC Radio 4 consumer programme You and Yours revealed that a woman nearly lost her home after the Office of Public Guardian granted lasting power of attorney (LPA) over her affairs to a fraudster claiming to be her sister. Investigation by the programme showed the government department currently does not use fraud detection to cross reference identities on applications, and employs no trained fraud investigators.
Martin Cheek said the case showed it was no longer enough for conveyancers to just check that hard copy documents were in order as part of the legal process of selling a house, and that it was essential to conduct stringent electronic checks to prevent identity fraud and anti-money laundering activity by criminals.
“Property is increasingly becoming the target of fraudsters, who have been using fake identities in attempts to gain legal title of properties, and shows why KYC/AML checks using electronic verification should be a fundamental part of due diligence,” he said.
“In this case the criminal provided conveyancers with a genuine LPA document. However, it had been obtained using fraudulent documents and had multiple factual inaccuracies, including fake names and signatures.
“This highlights how the traditional approach of checking hard copy documents as part of property sales is no longer enough. While it is welcome that the Land Registry is now endorsing facial recognition using of cryptographic and biometric technology for identity ID documents, it is essential for this to be supported by data such as credit reporting.”
In the case highlighted by BBC Radio 4’s You and Yours, conveyancers at the solicitor’s firm dealing with the sale of the property became suspicious when the woman was unable to provide documents to support the LPA, and the sale did not proceed.
The flat owner, whose name has not been made public, had left her home empty while she was caring for her mother during the Covid-19 pandemic lockdowns. While she was away the locks on the flat were changed allowing other people access to her post, and a woman calling herself Julie forged a form which resulted in her being granted lasting power of attorney over the affairs of the flat owner – whose property she then attempted to steal.
The story about the LPA fraud follows a recent report on the Your and Yours programme about how the owner of a house in Luton was the victim of identity fraud, which resulted in his home being sold after a fraudster registered themselves as the owner with the Land Registry. Police investigating the case have arrested a man on suspicion of fraud by false representation.