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Buying a property? Don’t get duped out of your deposit.

10 January 2016

The housing market is something of a national obsession in the UK. Sadly, it looks like more and more fraudsters are watching it closely too. There have been growing reports in the media of fraudsters duping unsuspecting solicitors, house buyers and vendors, into transferring their money into scam accounts.

Buying a house is stressful enough without having to worry about fraud. This blog aims to explain conveyancing scams and gives you some simple tips to protect yourself.

How does it work? 

Fraudsters hack into email accounts and monitor exchanges between buyers, solicitors and estate agents.  When they see an opportunity, they pounce – usually when the sale is near completion and large amounts of money need to be transferred between the parties as deposits.  Fraudsters create a spoof email that looks like it is from the solicitor and say that the account details to transfer the money have changed, and ask that the money is transferred to the account.

Sometimes they target the buyers – asking them to transfer their deposit to the wrong account. Sometimes they target solicitors direct – asking them to transfer sale funds to a different account.  Whichever way they choose, the end result is the same. Money meant for legitimate vendors is transferred into the hands of fraudsters.

In one case study, a couple engaged a solicitors firm for their house purchase, and paid deposit funds to the solicitor’s genuine bank account. Shortly before completing the purchase, the couple received an email purporting to be from their solicitors; claiming that their main bank account was being audited, and requesting that house completion funds be paid to a different account.

In an effort to confirm that the email was genuine, the couple replied to the email and requested their unique client ID number. The ID number was duly supplied by the fraudsters, who had obtained this information by hacking the genuine solicitors. The couple transferred house completion funds to the specified bank account, unaware that they were transferring funds to criminals, and not their solicitors.

How do I prevent it? 

As ever – start with safe cyber.  Fraudsters are hacking emails to carry this scam out.  Make sure you keep your antivirus up-to-date – and why not ask your solicitor whether they regularly update theirs too.  Solicitors need to consider the security measures and encryption they have in place to protect their email and other company systems from hackers. Questions from clients about cyber security might help raise awareness at their end too!

And when you are involved in a purchase, follow these steps to help reduce your risk:

  • Agree a process for payment early on – for example, all parties should agree and emphasise that bank account details will only be changed if instruction is provided face-to-face, or a phone conversation takes place between known contacts.
  • Never confirm the authenticity of a request to change account details over email or using contact details provided in the email.  The contact details could be fake too. Instead use known contact details and speak to existing contacts, to verify that the request is genuine.
  • Experts who have seen the fraudulent emails with fake account details say that they are often impossible to distinguish from the real thing, so don’t waste time trying – a phone call or face-to-face meeting is the only way to be sure.
  • Emails seem to be the preferred method of the fraudsters but be wary of phone calls from people claiming to work for or represent your solicitor’s office.  Remember the fraudsters are likely to have read all your correspondence, so they may cite details about the sale that you may think only known to you and your solicitor and use these to gain your confidence.
  • As above, all parties need to keep their anti-virus software up-to-date and regularly install system updates. Visit the Cyber Aware website for lots of tips.
Posted by: Sandra Peaston

Sandra is the Director of Research and Development at Cifas.


The future of fraud and corruption for international development

31 March 2016

Ahead of the Cifas Annual Conference 2016, former head of counter fraud at Oxfam, Oliver May, shares his views on how fraud and corruption will affect the international aid industry.

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Posted by: Sandra Peaston

Sandra is the Director of Research and Development at Cifas.