There are four principle ways in which agents cheat customers: failing to tell sellers of higher bids when lower bids provide the agents with more commission through mortgage and insurance needs; switching second bidders to other properties when buyers are in short supply; selling unnecessary insurance or the wrong types of mortgages because they offer better commissions; and leaking to potential buyers the lower price to which sellers are ready to agree. Forms of fraud include systematic frauds, valuation abuses and major frauds in which the perpetrators disappear. Solicitors play a key role in the latter form by ensuring that multiple mortgages are taken out in fictitious names, or on fictitious properties. In cases involving systematic status abuse, the fraudster purchases a number of properties through nominees (possibly employees), rents them, and may also claim tax relief or local authority grants. In valuation frauds professionals sell properties to each other and use grossly inflated values to obtain mortgages. There may be some complicity on the part of lenders, whether banks or building societies, who relax their vetting procedures, especially in competitive lending situations.
Following the property boom in the 1980s in the UK, mortgage fraud had risen to record levels. In 1991 over 1,000 cases were being investigated involving £500 million losses for banks and building societies. A 1993 UK study estimated mortgage fraud accounted for over £1 billion in damage over the previous few years. The most alarming growth in fraud was reportedly amongst professionals, usually estate agents, solicitors and even building society managers colluding together.