Estate agencies report significant increase in attempted fraud
New research reveals 70% of estate agencies have witnessed a surge in fraud largely involving fake identities used to buy or let properties.
Estate agents have reported a huge rise in attempted property fraud just as tough new AML rules are introduced, says Credas’ boss Tim Barnett (pictured).
A survey by the digital identity verification provider among 250 estate agents found that 70% have witnessed an increase in fraud cases over the past year, with over half (52%) encountering fake identification documents.
The survey also reveals that fraud prevention (34%) has now overtaken customer experience (24%) as estate agents’ primary operational concern.
Barnett says: “As fraudsters grow more sophisticated, the message is clear. The real estate industry must adopt more advanced techniques to stay ahead.”
Digital shift accelerates
The property sector is responding with a technological revolution, with 65% of fraud cases now being detected using digital or automated methods rather than manual document checks.
However, Credas’ research has exposed a serious enforcement gap, with only 14% of agents regularly reporting fraud cases to authorities and a staggering 56% rarely or never escalating cases to law enforcement.
According to Barnett: “Fraud is getting worse. But the good news is that technology is not just keeping pace, it’s gaining ground. Digital ID verification is proving to be one of the most effective tools in detecting and preventing fraud.”
The penalties for non-compliance are significant.”
The fraud surge has coincided with mounting regulatory pressure. Since May 14, letting agents have had to check all landlords and tenants against sanctions lists for every transaction, regardless of the rental value of a property. Under the old AML rules, this only applied to rentals over €10,000 per month.
Industry body Propertymark has warned agents: “The penalties for non-compliance are significant and can have a lasting impact. Agents could face a prison sentence of up to two years or an unlimited fine.”
Last year, before the tough new rules came into force, HMRC data shows estate and letting agencies were fined a total of £3 million for 468 AML breaches.
