The Financial Services Authority is warning brokers to be wary of property hijacking.
The regulator says it has seen an increase in cases where fraudsters try to obtain mortgages on empty properties they do not own, which it dubs property hijacking.
The fraud is perpetrated by introducers who are not local and are unknown to brokers introducing business to them.
In its smaller firms regulation round-up for April the FSA states: “This demonstrates the importance of undertaking appropriate due diligence when engaging in new relationships to ensure that you know who you are dealing with.”
Des Fitzpatrick, interventions manager at the National Fraud Authority, says it has been aware of the issue for some time.
He says: “It isn’t just house stealing but also impersonation of the owners of encumbered properties to get a mortgage.”