Exclusive: One reader's £4,760 property scam

by Tony Levene on 04 November 2010  |  9 comments
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Tony Levene reveals how a disappearing property scammer stole £4,760 from a lovemoney.com reader.

Selling property is tough these days - loans are hard to find and many buyers feel too insecure to purchase.

So when someone offers the asking price – and a little more to “clinch the deal” what do you do?

Now multiply this fourfold as you have four properties, and the temptation – understandably - to say yes will soar.

But as Eric, a lovemoney.com reader from Yorkshire told me, you could be setting yourself up for major bank account surgery.

Sounds too good to be true?

In the summer, he decided to sell four buy-to-let properties in South Yorkshire, valued at £1.3m in total. A Sheffield estate agent advertised the houses in local papers and on Rightmove.

A few days later, he was called by Ben – there never was a surname – who said he worked for International Property Group which, he claimed, was interested in buying. 

“Ben said he had investors interested in all four. He said one of his people would view the properties and that, if everything tallied, he would recommend the properties to these investors. There were no upfront fees but providing a sale was agreed, the investor and I would each pay £1199.00 for each sale. That, IPG said, was how it made its money.”

Eric checked out IPG at Companies House under parent company “The Letting Agent Ltd”. The company looked fine and had a City of London address. The website – investpg.co.uk – also appeared good.

A day later, Stavros Capello and Gemma Roberts came to view the properties. They liked them so much that they offered a few thousands more than the asking price to “secure the deal”.

Eric tells me: “Everything seemed above board so we paid the fees totalling £4,760. Solicitors details were exchanged and sales memorandums produced. The solicitors acknowledged they were clients, reinforcing our belief that all was genuine.”

Delays and excuses

But it was downhill after that. Emails went unanswered for days, phone calls were ignored and when Eric managed to contact IPG, it was all delays and excuses.

Eventually Eric realised there were no buyers. He went to the Fraud Squad which said it could do nothing as it could not trace Ben or Stavros or Gemma or IPG directors Peter Jones or Mark Jones. And the IPG bank account had been cleared out some weeks before.

His only consolation was that he did not fork out a further £4,000 to “fast-track the legal work.”

Eric has not been alone in losing money to IPG. But that's no consolation either.

The Investment Property Group was registered at a City of London maildrop (City Road, EC1) and should not be confused with any other similarly-named company.*

Code of conduct

Its website has been taken down. But before it disappeared, it was impressive.

Under “protection”, it said: “Customer protection is the key to our service, that's why all of our staff are Accredited International Real Estate Professionals that adhere to our code of conduct.”

There was an “International Accredited Code of Conduct” on the website. This covered areas from disability discrimination to confidentiality.

This was cut and pasted from Airep, the “Accredited International Real Estate Professionals” which is based mainly in Spain and the Middle East. It does not list IPG or any other UK firm in membership. And why should it as a London firm working in Yorkshire is hardly international (apologies to Yorkshire nationalists!)?

The English on the IPG website is tortured. The firm uses “weather” for “whether”, while “us and your buyer cover the cost of your valuation” is hardly going to get more than an English language GCSE grade F. And, poor English aside, it is contradicted in the same paragraph when it says: “On occasions we may require a contribution towards the cost of the valuation.”

The Financial Services Authority has now added Investment Property Group (also known as InvestPG) to its warning list of unauthorised firms.

Eric says he can just afford the loss. Not all victims are that lucky.

The lesson you can learn

The lesson here is never to pay an upfront fee for selling a property or anything else. Wait until you have the proceeds safely in your bank account with all cheques fully cleared before handing over money.

After all, that's what would have happened with the estate agent Eric first approached.

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* For example, The Investment Property Group is bears no relation to the IPGgroup.co.uk based in Swansea.