There's been a considerable uptick in conveyancing fraud over the years. With the passage of time, cyber criminals are getting more savvy. The global coronavirus pandemic bringing the world to uncertainty has allowed a window to open for innocent people to be victimized.
One of the biggest targets for fraudsters are people looking to purchase homes going through the conveyancing process. This is due to the high costs and figures involved that people put up in order to make payments on the house they want. There's tens of thousands of pounds involved with putting down a deposit alone. Third party costs and legal fees bring on even more spending from homebuyers.
Since things are particularly stressful at the time, fraud is not necessarily something that comes into consideration. That said, it should be, especially since the Solicitors Regulation Authority (SRA) reports that conveyancing fraud victims lose an average of £101,000.
When an unscrupulous person gets information about a property sale or purchase, it's usually because they stole personal information. It allows them to intercept emails between conveyancing solicitors and buyers that is then used for nefarious purposes—usually for making money.
The usual conveyancing fraud case sees the buyer getting contacted by the scammer just as the purchase is ending. Most of the time, it's under the guise of solicitor impersonation. The fake solicitor will then ask for the completion monies, deposit, and/or other fees from the buyer. All of that will then end up being placed into the bank account of the scammer. When the guise is finally revealed and the real solicitor and/or buyer finally figure out it was all a ruse, it will be too late. The money-and the fraudster-will be long gone.
As previously mentioned, sophistication is now a quality of conveyancing fraud. Recently, there was a high-profile case wherein a fraudster conducted a fake sale. What they sold was not their own property, it was someone else's! They did this through using the real owner's TV licence and driving licence for two solicitor firms and a buyer that they were the genuine owner.
Since they seemed legitimate enough, the buyer ended up transferring £1.1 million to the scammer, who had the solicitor move the money to China before completely vanishing. By the time the buyer was trying to register the purchase, HM Land Registry flagged some issues within the transaction. It was only when that happened that the scam was finally uncovered, much to the buyer's distress and chagrin.
COVID-19 and Conveyancing Scams
The Law Society gave a warning back in April 2020 that the coronavirus pandemic's uncertainty gave cyber criminals and fraudsters a rather unique window of opportunity. Communication via email is at an all-time high between conveyancers and buyers, heightening the risk of interception. Since the national lockdown restrictions have been unpredictable and change constantly, many buyers want to close on transactions as quickly as possible. This sense of urgency can lead to some rather evident fraud signs being overlooked entirely. Granted, some signs are more subtle than others, but this is why taking the time to go over details is crucial. In these situations, having a high sense of awareness can make all the difference.
In order to help restart the housing market post-lockdown, a Stamp Duty holiday was recently introduced to help people. Unfortunately, the big wave of buyers incoming that will be looking to find their new home is bound to attract fraudsters. High alertness needs to be in order.
How to Tell If You're Victim to a Conveyancing Scam
The point of contact for conveyancing scam victims and fraudsters is through email. That means it's vital to take the time to read each message thoroughly, asking questions about anything that raises suspicion. It's possible that you will end up questioning a genuine email or three—and this is fine, because caution is better than the potential consequences. No solicitor will feel negatively towards any client looking to protect themselves.
The emails themselves can serve as an indicator of a scam being under way. It's key to look out for the following:
Different tone than previous correspondence with solicitor
Spelling mistakes (sometimes this can manifest as a typographical error or two, sometimes it's far more blatant)
Also, if something feels off when it's read, the buyer should act on that gut feeling as well and look into it.
Aside from signs that can be determined through email, there are other possible red flags:
Bank details that are different from what was used before to send the solicitor funds
Different salutation than previous correspondence ("Dearest Sir/Madam" instead of "Good morning, [buyer name]")
Odd requests, like an urgent need for funds to cover additional unexpected costs that weren't discussed prior)
Requests for personal information with no discussion or reason for needing such
Sender's e-mail address mismatching from what's on the solicitor's website
Sender rushing things along and having a seemingly dire need for their request to be accomplished
Key tips for ways to avoid conveyancing fraud and stay protected include:
Avoiding money transfers for matters that are urgent
Calling the solicitor for confirmation regarding requests, bank details, and/or invoices
Comparing sender email address with previous solicitor emails
Determining the security measures of a solicitor
Ensuring exchange of sensitive information like bank details between solicitor and buyer through post
Having a complete understanding of the entire conveyancing process, costs and payment schedule and all
Trusting gut feel if something feels off
Using the solicitor's online payment portal if there is one available.
Conveyancing is a rather detailed process, which is why it typically has buyers involving a solicitor. Given the uncertain state of the world and the volatile real estate market, there's been an uptick in conveyancing fraud. This is largely due to communication between the buyer and solicitor happening over email, which is something that fraudsters tend to intercept.
Typically, fraudsters steal personal information online and commit identity theft. They pretend to be the buyer's solicitor and convince them to transfer money allegedly for additional costs related to the purchase to their account. As soon as the money has been transferred, the fraudster then vanishes into thin air with the stolen funds.
To avoid falling for this scam, it’s crucial to consider each interaction with your supposed solicitor carefully. Confirm personal information requests, bank details, and invoices; use the online payment portal of a solicitor if such an avenue exists; and exchange sensitive information like bank details over post instead of through email.
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