There are many types of fraud to watch out for – from invoicing scams and CEO fraud to telephone fraud and identity theft. However, a new fraud is on the increase – and those who fall victim are losing huge amounts of money.
Property purchasers should beware of the growing danger of conveyancing fraud, which is now the number one cybercrime in the legal sector. Also known as ‘Friday afternoon fraud’ – because most completions take place on a Friday – it can see home buyers duped out of tens of thousands of pounds.
One recent case, as reported in The Times, saw ‘Mary Smith’, a marketing professional, robbed of £60,000 by cyber-criminals. Similarly, earlier this year charity worker Howard Mollett revealed to The Guardian how he was duped out of £67,000 when completing a purchase on his first home.
The reason conveyancing fraud is so successful is because it utilises an existing relationship to con people out of their money. Cyber-criminals hack into the email accounts of solicitors and search for conversations that show a customer is about to complete on a property purchase.
This search is done speculatively and without a specific victim in mind – it’s more a matter of ‘striking lucky’ for the fraudsters. As conveyancing comprises a large portion of the work conducted by high-street solicitors, it isn’t challenging for scammers to find an email exchange between a house-buyer and solicitor.
Once they’ve found a suitable candidate, they lie in wait until the deal reaches the moment of completion, when the buyer’s deposit is due to be transferred. At this point, the hacker takes over the email account and communicates with the buyer, pretending to be their solicitor and intercepting any messages sent to the solicitor’s email account. The fraudster then provides false bank account details for the transfer, encourages the buyer to deposit the money swiftly to avoid missing the deal, and then empties the account while the victim is none the wiser.
As large bank transfers can take a few days to complete, it often takes a while before the buyer realises something has gone wrong. And with completions frequently occurring on a Friday, the fraudster gains a few extra days to evade detection.
Research by the Solicitors Regulation Authority (SRA) shows that conveyancing fraud is more endemic than presumed. It believes that cyber-criminals have targeted a quarter of legal firms in the UK, and successfully stolen money in 1 out of every 10 of these cases.
For regular home buyers, the damage is huge. According to the SRA, on average, victims of conveyancing fraud lose £101,000. As banks do not cover this type of fraud, the loss is considerable.
Although solicitors should ensure their accounts can’t be hacked, if the buyer authorises the bank transfer they are partly culpable; most solicitors state that individuals must take responsibility for confirming bank details themselves. So how to avoid falling victim?
Firstly, don’t rely solely on email communications. Before making a transfer, telephone the solicitor or visit in person to confirm their bank details. If you receive communication that the bank details have changed, make sure you verify this securely – by telephone or in person – with the solicitor with whom you are used to dealing. You can also transfer a small amount and then check this has been received before proceeding. And finally, don’t let yourself be rushed into making a transfer of such importance – coercing victims to hurry is a common tactic used by criminals.
And remember – this type of fraud isn’t limited to solicitors – it also occurs when scammers hack into builders, accountants or other professional services providers.