Zoopla says it has been forced to carry out more stringent security checks, which includes a vetting form for new estate agents, after an unscrupulous tenant tried to sell his landlord’s house via the property portal for more than £400,000 just a fortnight after getting the keys.
Changes to the online property platforms is heavily welcomed after several instances of fake listings and poor due diligence has led to victims losing thousands of pounds.
Estate agency businesses and Letting agency businesses have strict money laundering regulations they must consider as they carry out supervised business activities however online platforms such as Zoopla are not obliged to carry out the same level of due diligence and fraudsters can take advantage of platforms that are not carrying out supervised activities.
Selling a rented property to a first time buyer
Andrew Smith, 41, was jailed last month for two years and six months for the ‘almost unbelievable’ crime, for which he even rented furniture from a show home company.
He claimed he was moving to the area for work when he began renting the three-bedroom home in Argyle Street, Cambridge, in February 2020. But within two weeks had listed it for sale online via a fake estate agent.
A prospective first-time buyer said he nearly bought the house after agreeing a price with the fraudster, and came to view the property in June this year with a drain surveyor.
But the victim realised the possible scam after speaking to neighbours who told him they thought the house was rented and not for sale.
Max Holland had an offer accepted on a home in Cambridge in June 2020, but then police rang to tell him the house was not for sale by the real owner.
A joint BBC Radio 4 You and Yours and BBC Look East investigation has discovered fake estate agents had been invented and posted their listings on Zoopla.
Holland said he had been house-hunting and saving for a deposit when he spotted a property that “seemed like a pretty good deal”.
Using a form on the site, he got in touch with the agent, called Smith and Jones Estate Agents, who replied saying it had been sold – but offered him the details of a similar terraced house nearby which was “even nicer”, he said.
According to its website, Smith and Jones Estate Agents was based in Bedfordshire and covered surrounding areas, Mr Holland said.
He said he was promised a virtual viewing because of the Covid-19 lockdown, but “even before then I put in an offer”.
“I think he mentioned there was one other party that was interested and was also making an offer,” he said. “They rejected my offer and explained this property had now been sold to this third party.”
Det Con Dan Harper, from Cambridgeshire Police, explained that another individual had an offer accepted on the house.
“Everything was going through OK, but [his] lawyer mentioned a possible issue with drainage that might go through another property,” the detective said.
“So [the prospective buyer] ordered a drain survey… and out of curiosity [he] went along for the visit as well.
“When they got there they realised it might have to go into a neighbour’s garden, so they spoke to one of the neighbours who said, ‘Oh, I’m sure there’s a tenant living in that property,’ to which obviously, [the prospective buyer] said, ‘Really? That doesn’t make sense.’”
Harper said that prospective buyer then called the letting agents for the property, who then spoke to the home’s real owner, Simon Lake.
Lake told the BBC: “On 2 June 2020 I received a call saying, ‘Are you selling your house?’.
“I said, ‘No.’ They said, ‘Well, it’s strange this, because someone’s contacted us who is acting for the purchasers or is the purchaser themselves.’
“The next thing I heard was a call from a detective who introduced himself and explained that this is now under inquiry.”
The prospective buyer had contacted Cambridgeshire Police and Harper said the man realised he had been defrauded, spending £3,000 in fees by that point.
Holland said he then got an email out-of-the-blue from Andrew Smith, “saying the sale isn’t really going that well – something to do with the buyer’s mortgage offer falling through or something similar”.
“He said they’re going to remarket the property soon and I would get first dibs seeing as I’d previously put in an offer,” said Holland.
“Eventually I got a phone call from a detective with Cambridgeshire Constabulary and he said, ‘Stop trying to buy that house, it’s not for sale.’, he added. “Then it all made sense why they weren’t responding to requests for viewings and access to surveyors.”
Holland admitted by that point, “I sort of felt it wasn’t really going to happen anyway”, adding: “When I got the call I was relieved there was a reason for all of this and I could draw a line under it.”
Zoopla said since last year it had stepped up its vetting process.
A Zoopla spokesperson said: “We always do our utmost to ensure only legitimate estate agents list on Zoopla and have a robust system of vetting and checks in place which is regularly reviewed and refined.
If you run an estate agency and require an ID and AML check for your clients, get in touch with Verify 365.
AML checks for estate agents may not be glamorous, but they are critical, and agents should ensure they adhere to best practices for any potential HMRC audit.
Anti-money laundering (AML) tool for estate agents.
Verify 365 has launched a new compliance platform for agents that uses a customisable workflow including Open Banking, financial data analytics, NFC biometric and cryptographic technology to automate and carry out anti-money laundering checks.
Are estate agents doing AML and ID checks?
With the high value of property assets, the property market in the UK is a prime target for criminals for money laundering, enabling them to ‘clean’ large sums of money. It’s an estate agent’s legal obligation to perform due diligence on every client to reduce the risk of fraud.
AML for estate agents is often a time-consuming administrative process. From checking proof of funds and verifying identities – you may be wondering if there’s an easier, quicker way – Verify 365.
For further guidance on how to meet your AML obligations – get in touch with us.
