Home insurance holders warned not to take out cover for property fraud

Sunday, 03 April 2011

Home insurance policyholders are being told not to buy worthless cover to protect them against property title theft fraud.

This type of money scam is where criminals take out a mortgage policy in the property owner's name; they then take the money and leave people facing thousands of pounds worth of debt.

However, during 2010 the Land Registry recorded only 53 cases of title theft fraud and it has a fund to pay out to victims.

Paul Marsh, from the Law Society, said: "Property title theft does occur, but is not as widespread as scaremongering insurers make out."

Furthermore, it has not stopped some insurers offering worthless home insurance add-ons, for about £150, to protect against this fraud.

Mr Marsh added that property owners can restrict fraudsters taking out a mortgage in their name, by ensuring the land registry has their address on record.

They can also take out a certificate, which needs lenders to verify the homeowner's identity before taking out a mortgage.

Recently, research from the Credit Industry Fraud Avoidance System found that last year home insurance fraud fell in comparison to 2009.

Posted by Noel Martin

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