Mortgages

Spike in scammers fleecing homeowners with fake low mortgage rates


More homeowners are reporting mortgage scam attempts as fraudsters “pray on uncertainty” to try and get money from worried homeowners, data shared exclusively with i shows.

Reports of mortgage and lender loan fraud are up by a third (33 per cent) over the past three financial years, after higher rates started to put pressure on household finances, data from Action Fraud shows.

Action Fraud – the national reporting centre for fraud – said it received 341 reports of mortgage and lender loan fraud relating to interest rates and fees last financial year – up from just 257 in 2020/21.

Higher rates of this type of fraud were last seen during 2019/20, the period covering the very start of the Covid pandemic, when scammers often preyed on those forced into financial difficulty due to lack of work and other pressures.

In 2020/21 very cheap mortgage deals were available – sometimes below 1 per cent – but now, the cheapest rates are above 4 per cent with some much higher.

Homeowners or potential buyers will likely be tempted by the offer of lower and more affordable interest rates.

Action Fraud told i the sort of scams seen often involved fraudsters offering customers low interest rates, but taking a large fee to do so.

For example, a ‘broker’ would tell someone looking for a mortgage they could get them a low rate of say 2 per cent but they would need an upfront cash payment of a few thousand to secure it.

They would then take the money, never to be seen again, or say they couldn’t get a rate that low after receiving the funds.

Another example sees customers invited to see if they are eligible for a ‘reverse mortgage’.

Known in the UK as an equity release mortgage, the product allows a homeowner to access cash in return for the loan on their home increasing in value.

The fraudster claims this offer expired in 24 hours, prompting recipients to act more impulsively, again charging a fee.

These emails are often sent from what Action Fraud called “nonsensical” email addresses but otherwise look relatively professional.

Brokers warned customers that mortgage deals that appear extremely good were likely to be fake.

“With higher mortgage rates, the cost of the mortgage will be higher on many households’ priority lists. Where there are consumer concerns, scammers won’t be far behind to prey on any uncertainty,” said David Hollingworth, associate director at L&C Mortgages.

He added: “Anything that sounds too good to be true should be approached with extreme caution, and you should expect that an adviser will want to run through plenty of detail around your needs and personal circumstances before they can provide any kind of product recommendation.”

Jane King, mortgage and equity release adviser at Ash Ridge, said: “My advice would be to always see the adviser in a bona fida setting – their office or your home – not down the pub or suchlike. Always check their firm is registered with the Financial Conduct Authority (FCA) and that the adviser provides you with a business card with the firm’s details on it.”

“A good, independent firm of advisers will have access to all rates from all lenders, so beware of anyone offering special deals as these are unlikely to exist.”

Have you been a victim of mortgage fraud? Get in touch: [email protected]

What could be a mortgage fraud – and what to do if you think it is

Action Fraud says this could be from a scammer…

  • An offer of low interest rates.
  • Colourful borders and a button to follow for a personalised quote.
  • A professional looking email with banners and images sent from multiple, generic email addresses.
  • This email offers a free quote and advises the recipient that they will “Never regret the money you’ll save”.
  • Generally sent from a non-sensical email domain, for example @sybogiu.pwnudhqlbgllfqxs.org, this very basic email has the subject line “Your mortgage could possibly be cheaper” and a link stating “This will just take a couple of minutes”.
  • The recipient is invited to see if they are eligible for a “Reverse Mortgage”, a form of equity release loan.
  • This will only take one minute but offers expire in 24 hours, prompting recipients to act more impulsively.

If you get a message like this…

  • If you have received an email you’re not sure about, report it by forwarding to: [email protected].
  • If you have any doubts about a message, contact the organisation directly.
  • Don’t use the numbers, addresses or links in the message – use the details from the organisations official website.
  • Remember, your bank will never ask you to supply personal information via email.
  • Before making significant financial decisions, speak with trusted friends or family members, or seek professional independent advice.



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