The firm said this was when fraudsters attempt to sell a home to an unsuspecting buyer, take out a mortgage secured against it, or transfer ownership using forged documents.
The most vulnerable properties are ones that are mortgage-free, rented out or left empty for long periods. In such instances, the genuine owner may not spot suspicious activity immediately.
Peter Gatenby, artificial intelligence (AI) practice partner at Novus Strategy, said: “Owner impersonation fraud may be rare but it’s a high-impact crime. The concern is that AI can generate increasingly convincing fake documents, meaning they are less likely to be detected by verification processes designed for an earlier generation of fraud. That means today’s figures may understate the real risk we’re facing in the coming years.”
He added: “A key challenge is that no single organisation has visibility of the entire property transaction journey or a complete view of owner impersonation risk.
“HM Land Registry sees suspected fraudulent registration applications, Action Fraud records payment diversion cases, and incidents involving forged identity documents or fraudulent conveyancer certification are not separately tracked, creating a fragmented landscape.
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“Identity and ownership are checked in isolation, at one desk, at one moment, with no shared, reusable, audited record of who was verified and how.”
Gatenby said the best solution to combating fraud is to verify a homeowners’ identity to a high standard. This could be through passport NFC chip verification, and to do it only once.
Firms struggle to detect fraud
This comes soon after SmartSearch’s compliance report revealed more than half of UK regulated firms across financial services, property, legal and accountancy sectors were struggling to verify who owns or controls the businesses they deal with.
Some 24% of regulated UK firms cited the abuse of digital identity and certified ID processes, and 22% pointed to synthetic identity fraud and the exploitation of personal data.
Gatenby further added that the effectiveness and security of verification services rested on the accreditation of third parties to trust frameworks, where signatures bear the weight of authenticity. If that verification can then be made available to other trusted parties to reuse, it becomes evidence that flows through the property transaction.
Gatenby said this was the basis for Horizontal Digital Integration (HDI).
