Fraudulent Letting Agents Rank High on National Scam Awareness Week Radar

by Mark Alexander

10:46 AM, 11th July 2016
About 2 years ago

Fraudulent Letting Agents Rank High on National Scam Awareness Week Radar

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Fraudulent Letting Agents Rank High on National Scam Awareness Week Radar
Fraudulent Letting Agents Rank High on National Scam Awareness Week Agenda

Fraudulent Letting Agents Rank High on National Scam Awareness Week Radar

I had a very interesting conversation this morning with Alan Harris of the Local Government Association.

This week is National Scam Awareness Week where 370 local Councils are uniting to expose fraudulent practices. I explained that Property118 Action Group is bringing a particularly large (multi-million pound) private criminal prosecution to Court next month via Mark Smith, Head of Chambers at Cotswold Barristers. The case involves a letting agent who failed to protect tenants deposits and used further client money due to landlords to fund his failing business whilst paying himself a huge salary, bonuses and expenses. If he is found guilty by Jury of charges of his charges, fraud by abuse of position, he faces up to 14 years in prison and confiscation of personal assets to pay compensation to victims.

Property118 reported on a similar case last month where the agent was jailed for over four years – LINK

Calling All Good Agents

We are calling upon Letting Agents who recognise the benefits of ensuring that Justice is served to criminal operators who tarnish the reputation of our industry to form Strategic Alliances – please see https://www.property118.com/strategic-alliances/

Property118 Action Group Fighting Crime

There are many examples of landlords having been victims of fraud by abuse of position committed by their letting agent where Police and CPS have dropped cases due to lack of resource.

We have several cases ongoing where agents have used client money to pay themselves huge bonuses before putting their businesses into administration. As a result of the Police failing to get involved Property118 Action Group has been helping to raise the funding necessary to mount private criminal prosecutions on behalf of our members. Many of these are now coming to trial.

Property118 Action Group pay all initial costs associated with private criminal prosecutions where groups of 15 or more of our members have been victims of crimes perpetrated by the same business. The Crown picks up legal costs once Magistrates agree that a trial is in the interests of the public, regardless of whether the accused is found innocent or guilty.

For more details please see https://www.property118.com/fighting-for-landlords-letting-agents/88096/

[strategicCTA]



Comments

Jamie Paterson

12:11 PM, 11th July 2016
About 2 years ago

Dear Mark,

Is it possible for you to disclose the name of the agency involved?
I really hope it is L... A... S... as their director would really deserve it for the evil things he did to his clients.

Many thanks to Property118 Team for your hard and precious work!

David Lawrenson

17:33 PM, 11th July 2016
About 2 years ago

Good article.

Fake letting agents and fake landlords exist and this is a growing area of criminality that is sadly, still not being dealt with effectively by the police or the Crown Prosecution Service.

I tell tenants that warning signs should flash if they view a property where the person handling the viewings says you can have it if you just put down a deposit and rent in cash right now. And to be especially wary if the property is being advertised at what seems a very cheap “too good to miss” rent.

It is dead easy to “scrape” property pictures from the internet and re-use them in a fake advert. Some criminals even go to the trouble of creating fake lettings websites. This is also not hard to do – a decent faker could do one in a few hours.

Once the criminal gets into a property, they will use a fake agency to pose as the landlord or letting agent. They then advertise the property cheaply to attract lots of demand and interest. This will rake in lots of reservation fees from would-be applicants. The criminals will even move some unfortunates into the property, which allows the fraudster to also take a “deposit” and the first months’ “rent” from the unsuspecting punters, before clearing off into the ether never to be seen again.

It is most rife in flats where security is weak and the neighbours are into the habit of letting any scally into the communal area who rings the bell to “deliver a pizza” or a piece of “mail” to another flat.

Many years ago I was a victim of this myself and my experience was that the police and the Crown Prosecution Service did not really see it as a crime and were reluctant to prosecute. I suspect that this has not changed much, with much of this crime going unreported or not categorised properly. That is why we say that, as a tenant and as a landlord people must be very much on guard for fake letting agents and landlords.

We tell tenants that the key things to protect themselves are...

• Google the landlord or agent to see if they are listed elsewhere or if any comments have been made about them. If they are using logos where they claim to be a member of a letting agents’ body, such as ARLA (Association of Residential Letting Agents) you could check with that body to see if they really are a member.
• Ask for the name of the landlord of the property (an agent should know this) and then use the land registry website to double check this. However, even if you find the name of the landlord is correct, this is still not evidence of a genuine let as anyone can obtain the owners name by paying £3 to the land registry. So ask for their ID.
• Never hand over cash - ever. A real letting agent and most decent landlords will want to check you out first and will therefore not be looking for anything more than possibly a small reservation fee to carry out reference and credit checks at this initial stage.

It is true that there will be some amateur (and not criminal fake) landlords who are prepared to take cash deposits and rent up front without doing any checks.
We tell tenants to not be shy about asking for ID proof. The landlord will be checking you out, after all, so you are entitled to check them out too. Tenants can explain that they have been a victim of a fraud before and just want to protect themselves. Suitable ID to ask for might be a passport or new style driving license (with the photo on it). Check the name against the land registry records. If it is not the same, ask why.

I explain more in my book, "Tenants Guide to Successful Renting" available at Amazon.

David Lawrenson
Site for landlords: http://www.LettingFocus.com
Site for tenants: http://www.Tenants-Renting-Guide.com

DALE ROBERTS

10:51 AM, 17th July 2016
About 2 years ago

Your comments, although relevant, do not address the full spectrum of letting and managing agents fraud. A very good case in point is that of Oliver-Knights who closed a bona fide business that had been in operation for many years without fault. They were members of all the necessary regulatory bodies. However, the business went rogue. Thousands of landlords and tenants were caught, in particularly the last six months of trading, and thousands of pounds was siphoned off to private bank accounts in the names of landlords, because this is permissible in the UK. The opening of a bank account in someone else's name without proof of identity. Worse, under UK law letting and managing agents act ostensibly on the instructions of the landlords once appointed. Leases can be signed off without my knowledge and tenants placed in my property without my signed sanction. And and it is landlords who are held responsible when the agency acts with impunity illegally. Letting and managing agents are not required to have a separate trust account under UK to law to manage the funds they receive. They are also not mandated to have insurance against bankruptcy or illegal practice. And the very organisations they are paying members of, that allegedly protect deposits and/or intervene when funds are misappropriated, neatly avoid responsibility for investigating such by claiming that recent membership fees were not paid by the defaulting company and as such no action can be taken. The very system is open to abuse because the UK is not prepared to regulate to protect. And that is the very reason these scams continue on the scale they do and will do so until managing and letting agents are held accountable for every action they undertake that is outside the instruction of the landlord.
It is the law that needs changing.

Mark Alexander

14:58 PM, 17th July 2016
About 2 years ago

Reply to the comment left by "DALE ROBERTS" at "17/07/2016 - 10:51":

Property118 Action Group are prepared to hold criminal operators accountable to the law.

Laws are being broken, the fact they are not being enforced is simple because everybody thinks it is somebody else's responsibility.

If 15 or more people are affected by a criminal operation, and they join Property118 Action Group, we will prosecute. We do not require any cooperation from Police, CPS or regulators to do that.

In all of the examples you have provided the basis of the private prosecution we would undertake on behalf of our members would be fraud by abuse of position. The directors of limited companies cannot hide from this behind any limited liability status of a company and neither can they hide behind the 6 year statute of limitations because crimes can be tried at any time, there are no limits.

The only reason we have not commenced proceedings against the directors Oliver Knights and other rogue operators is that less than 15 of their victims have joined Property118 Action Group and been prepared to give evidence.

[strategicCTA]
.

DALE ROBERTS

15:20 PM, 17th July 2016
About 2 years ago

I don't recall an article on the Property118 website requesting such, although I was directed towards the law firm you support to initiate private action against Oliver-Knights. That legal practise requested quite a substantial deposit to investigate my case. I declined.
However, if I inadvertently missed your "call to action" I apologise. All kudos to you for attempting justice.
A number of the Oliver-Knight victims took the matter up with Action Fraud and the company and its directors are presently under investigation.
However, this does not address the woeful lack of protective regulation that would prevent such corruption against landlords and tenants. The UK industry lags behind most countries where public money taken by companies is protected in separate accounts and cannot be utilised for the benefit of the company. Furthermore insurance protecting public money is mandated.
I reiterate - it is the UK law that needs changing.

Mark Alexander

15:28 PM, 17th July 2016
About 2 years ago

Reply to the comment left by "DALE ROBERTS" at "17/07/2016 - 15:20":

I disagree.

We do not require more laws.

The laws already exist and they are regularly being broken because nobody is enforcing them.

If nobody was ever punished for murder there would be more murders. It really is that simple.

To reiterate, the law is criminal law and the charge is "fraud by abuse of position".

If you get the new laws you want and nobody enforces them either you will still be no further forward will you? You efforts would be far better focused on encouraging people to take action by joining Property118 Action Group. We have a track record of helping landlords to enforce the law. No other organisation professing to protect landlords interests can justify making such a claim.

Get 15 victims or more victims of Oliver Knights to become lifetime members of Property118 Action Group and we WILL take up the case and fund a Private Prosecution. If the directors are found guilty, any assets they own will be confiscated as proceeds of crime and the sale proceeds will be used to pay compensation to victims that our action will be represented through Property118 Action Group membership.

I have added the membership CALL TO ACTION again below.

[strategicCTA]

DALE ROBERTS

16:01 PM, 17th July 2016
About 2 years ago

Reply to the comment left by "Mark Alexander" at "17/07/2016 - 15:28":

You contradict yourself. Thankfully there are laws against murder, as you glibly state, and thus those laws can be used against murderers without the victims having to take responsibility for bringing same to dismissive or uninterested regulatory bodies.
There are no laws regulating the corporate management of letting agencies. No laws protecting the funds made over to them, no laws protecting the deposits and rentals paid to those agencies, and no protection of the landlord who appoints them. Agencies have carte blanche to manage a landlord's affairs without accountability. The landlord is held fully responsible whether that corporate governance is legal or not. It is an egregious fact that leases can be drawn up without the knowledge of the landlord and tenants placed in properties without the landlord's sanction. The UK does not have bona fide systems in place to prevent this abuse. In fact it appears to take delight in making the role of the BTL investor most unattractive.
Recently, a property was sold without the owner being aware that banks, a reputable selling agent (Foxtons) and a legal practise had all pursued the sale without once determining if the seller was legitimate. I can assure you this would be impossible in my own country. I am legislated by law to meet stringent credit verifications for every financial contract INCLUDING BTL. No contract can be considered legal unless the ONE document is signed by both parties and witnessed by independent witnesses.
This would be a simple method to address fraud and corruption in the managing and letting agencies in the UK and I will lobby incessantly for that change.
Thank you for your input on a Sunday afternoon.

Mark Alexander

18:45 PM, 17th July 2016
About 2 years ago

Reply to the comment left by "DALE ROBERTS" at "17/07/2016 - 16:01":

Why do you think I contradict myself?

If an agent abuses his/her position to fraudulently use money belonging to a client (e.g. tenants deposit or rent collected on behalf of a landlord) then that is fraud. Several agents have received prison sentences for committing such crimes and several more are facing prison sentences as a result of action that Property118 Action Group is taking.

Would you like to read some reported examples? If so please see the Google search link below.

https://www.google.com.mt/webhp?sourceid=chrome-instant&ion=1&espv=2&ie=UTF-8#q=letting+agent+fraud&tbm=nws

and this one

https://www.google.com.mt/webhp?sourceid=chrome-instant&ion=1&espv=2&ie=UTF-8#q=letting+agent+jailed
.


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