June 15, 2024

An increasing number of homeowners have been targeted by mortgage scams as tricksters take advantage of their anxieties to defraud them, according to data exclusively presented to i.

Mortgage and lender loan scam report rates have risen by 33 percent in the last three fiscal years, as elevated interest rates put a strain on personal finances. This is based on information from Action Fraud.

Action Fraud – a national hub for fraud-related reports – revealed that last fiscal year they received 341 reports of mortgage and lender loan scams related to interests and fees. This marked a significant increase from the 257 reports in 2020/21.

Highest incidence of such scams was observed in 2019/20, at the onset of the Covid crisis, when swindlers ruthlessly exploited those struggling financially due to joblessness and other stressors.

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In the 2020/21 period, extremely attractive mortgage deals were on offer – some were even less than 1 per cent. However, presently, the cheapest rates are above 4 per cent, with several noticeably higher.

Current or intending homeowners would naturally be swayed by the potential of lower and more manageable interest rates.

Action Fraud informed i that typical scams involved fraudsters promising customers reduced interest rates, while demanding a substantial fee for this service.

For instance, a so-called ‘broker’ would guarantee a despairing mortgage seeker a low rate of around 2 per cent, but this would require an immediate cash payment of thousands. They ultimately vanish with the money or claim they cannot obtain such a low rate after receiving the cash.

In another scenario, customers are encouraged to check their eligibility for a ‘reverse mortgage’.

Referred to as an equity release mortgage in the UK, this product enables homeowners to tap into cash while the loan on their property appreciates in value. The scammer imposes a 24-hour expiration on this offer, prompting recipients to act impetuously, and again charges a fee.

This kind of emails typically originate from blatant “nonsensical” email addresses yet maintain a semblance of professionalism.

Brokers have cautioned customers that too-good-to-be-true mortgage deals are likely frauds.

“Given the escalating mortgage rates, the affordability of the mortgage is likely to be a top ranking concern for most households. Scammers are never far behind when consumers are feeling unsettled,” suggested David Hollingworth, associate director at L&C Mortgages.

He further stated: “Extreme skepticism is warranted where offers appear too good to be true. Before any product recommendation, expect an adviser to thoroughly discuss your needs and personal situation.”

Jane King, mortgage and equity release adviser at Ash Ridge had this advice: “Make an effort to meet with the advisor in a bona fida setting – such as an office or your house – avoid less formal places like pubs. Consistently check the FCA registration status of the advising firm and ensure that the advisor hands you a business card with specific details of the firm.”

She also added: “Profit from the comprehensive services of an independent, good firm of advisors who can provide you with rates from all lenders. Be cautious of special deals as these are likely non-existent.”

If you have fallen prey to mortgage fraud, please get in touch: callum.mason@inews.co.uk

Recognizing Possible Mortgage Frauds and Suitable Courses of Action

According to Action Fraud, a scammer might…

  • Offer low-interest rates.
  • Use colorful borders and a clickable button for personalized quotes.
  • Send an email appearing professional with banners and images from multiple generic email addresses.
  • Offer a free quote and assure the recipient of considerable savings.
  • Send emails from absurdly nonsensical domains, such as @sybogiu.pwnudhqlbgllfqxs.org, with a basic subject line like “Your mortgage might be cheaper” and a quick-link stating “This will only take a couple of minutes”.
  • Encourage the recipient to determine eligibility for “Reverse Mortgage” – an equity release loan.
  • Stress on a 24-hour expiration of the offer, encouraging impulsive actions from recipients.

In case you receive a suspicious message…

  • Report any email arousing suspicion by forwarding to: report@phishing.gov.uk.
  • Contact the organization directly if you have doubts about a message.
  • Avoid using the contact details contained in the message – use those from the official website of the organization.
  • Bear in mind that banks will never request personal information via email.
  • When making significant financial decisions, consult trusted friends, family members, or seek professional independent advice.