The Land Registry (LR) claims that property worth an estimated £50m has been ‘saved’ by its fraud prevention measures (see Fighting Fraud). An achievement, indeed, but one for which any tendency to self-congratulate should be tempered by the less flattering statistic that within the space of two years LR’s provision in its accounts for pending claims for compensation for fraud has increased five-fold; from £10,556,000 (2009) to £57,616,000 (2011).
LR’s published business plan for 2011/12 acknowledges that it ‘faces challenges and risks to the achievement of its strategic business objectives. The main risks relate to registration fraud, failure of our computing facilities, and the integrity of our register’. Given the five-fold increase in unprevented fraud the public is entitled to know the full scale of the problem and exactly what LR intends to do about it.
LR claims to have a specialist unit which reviews and oversees activities to counter-fraud. But does it? A document dated 29 March 2011 passing between LR and the BBC (revealed in a response dated 6 April 2011 to an FoI request) claims that ‘[LR] created a specialist counter-fraud team in 2006’. However, in a reply dated 30 June 2010 to an earlier FOI request, LR stated that it ‘does not have a dedicated department that investigates all alleged land and property frauds’. The inconsistency and LR’s true position should be clarified.
LR’s publicly expressed position is that an open Land Register and the abolition of the Land Certificate are not factors material to the increase in property fraud. The same FoI document dated 29 March 2011 LR/BBC states ‘[LR does] not believe the growth in property fraud is connected to more information being available online or the abolishment of land certificates’.
However, an internal email between LR officers dated 24 February 2011 (in reaction to an article in a local newspaper) states that ‘the scrapping land certificates comment is tricky - it could lead to unwanted questions of whether it has contributed to registration fraud itself which we have evidence to say it may have done’.
What has LR done to identify the enemy within? In March 2012 Surjeet Chana, a 64-year-old LR employee of 33 years standing, was convicted at Southwark Crown Court after being found guilty of abusing her position of trust at LR to supply documents and ownership signatures. On arrest the police found £38,000 cash in her loft. Her fraud involved nine identified properties but Scotland Yard suspect that many more homes may have changed hands illegally. What step has LR taken to ensure that this can never happen again? Are all LR employees (like CQS panel members and their employees) now subject to compulsory Criminal Records Bureau checks? We are entitled to know.
LR’s only public demonstration of action on title fraud is two-fold; a warning on its website (for those who visit it) to keep addresses up to date and an offer to provide without charge (but inexplicably only to non-resident owners) the entry of a Standard Form LL Restriction - the requirement for a conveyancer to certify that the signatory to a document is the person who he or she claims to be. If Standard Form LL is so effective then why is it not simply entered at a stroke across the entire register?
The cynic in me suggests that this is no more than a buck-passing exercise. In July 2012 the promoters of Confidential Access (a now defunct website) were convicted at the Old Bailey of identity theft on an ‘industrial scale’ and of ‘providing fraudsters with all the tools needed to create false identities’. They charged £50 for a utility bill and £800 for a set of professional sealed and certified trading accounts with a reference. How in the face of high-quality identity theft on an endemic scale can standard restriction LL operate as a barrier to other than the most hapless fraudster? No doubt conveyancers will be invited to pick up the bill when the barrier is breached.
It is time for LR to come clean in a full, frank and publicly accessible manner, as to the existence of title fraud, the full extent of the risk, and what meaningful steps it will take to guarantee the protection of titles under its custodianship. The prospect of statutory compensation (where available) is inadequate. One of Surjeet Chana’s victims stated in a letter to the court that she had ‘lost her past and her sense of identity [and] felt huge loss. It was emotional, deep and went to her core’. Another said that ‘the whole experience has left me in near financial ruin and certainly taken a toll my health - it is clear to me that I have been victim of failings within the LR'.
Patrick McCloy, McCloy Legal, Bradford on Avon