Anyone who thought the dealing with a global pandemic meant an end to property fraud was wrong. With large sums of money involved, there are always people trying to scam you.
Here are two scams specifically targetted at property sales, but the techniques are often used with other less lucrative purchases …
The ‘Stealing Your Home’ scam
The BBC recently reported on the case of a man’s house being ‘stolen’ in Luton.
The facts of the case are depressingly familiar: a fraudster stole the identity of an unsuspecting homeowner, sold his home from underneath him while he was away, and disappeared with the proceeds.
This sad case once again brought into sharp focus the need to follow the Law Society’s guidance when undertaking due diligence before buying property, and not necessarily relying on just one identity check. With something as valuable as a house, it is important to consider all the circumstances of the sale and be ready to question it if anything does not add up.
Issues you and your conveyancer should look out for
Coming across just one of the circumstances below may not be cause for alarm, but multiple instances should put you on your guard that the seller may not actually be the legitimate owner:
- the seller’s conveyancing solicitor is not located close to the property;
- their ID documents have been issued recently;
- the seller has little knowledge of the property they are selling;
- the seller has no documents linking them to the property being sold, such as council tax or utility bills;
- it is a high value property, particularly if there is no mortgage to pay off;
- or if a quick sale is required for no obvious reason.
All parties – the conveyancers, the estate agents, and the buyers – should be vigilant.
Avoiding having your home ‘stolen’ is simple
According to the BBC,
However, preventing this fraud from happening to you is a simple and cheap matter. Visit the Land Registry website and set up a property alert here:
It will then generate email alerts for a property, monitoring activity so that you don’t have to. Taking this step costs nothing – and can save thousands.
Payment Diversion Fraud
Payment Diversion Fraud is another increasingly common type of property fraud.
In Payment Diversion Fraud, criminals hijack email communications between lawyers and their conveyancing clients, then contact the clients pretending to be the lawyer. The object is simple: they are trying to persuade people to send funds to an account that they control, and not to the correct solicitor’s account.
Avoiding falling victim to this fraud is also a simple process.
If you ever receive an email purporting to be from your lawyer advising you that their usual bank account has been frozen, STOP.
Especially if they then ask you to send funds to a new account.
You should immediately contact your conveyancing solicitor, using a telephone number you have previously used to contact them, and verify the account details.
Even sending small test payments is not a guarantee that you are sending funds to the right account.
If you are in any doubt speak either to your conveyancing solicitor, or to another senior member of the firm.
At Cunningtons LLP, that would probably be Jason Bradshaw, our Compliance Officer for Finance and Administration to check the details BEFORE you send any money.
This kind of fraud is becoming more popular, even though stopping it is, once again, a simple matter.
Payment Diversion Fraud in action
Reported in October 2021, a case study showed that scammers stole £640,000 from an unsuspecting purchaser, in exactly this way.
They had intercepted email communications between lawyer and client, created a spoof email account with a name very similar to that of the lawyers, including forging the firm’s headed paper, and requested payment of the exact amount of money the home buyer was expecting to pay.
On this occasion, payment was sent to the fraudster’s account, and was never recovered.
When the fraud came to light and it turned out that the lawyer had not requested the funds, it had a devastating life-long impact on the client’s life and finances.
Avoid falling victim to Payment Diversion scams
How can you protect yourself against this property scam? There are steps you can take:
- Contact your lawyer at the outset of your transaction by phone to check their bank details, to be sure it matches your expectations.
- Lawyers VERY RARELY change their bank details, so if you do receive communication that this has happened, you should be wary and contact your lawyer BEFORE tranferring any funds.
- Set strong passwords and ideally two factor authentication on your email account to help stop fraudsters hacking your account and spoofing your communications.
- Avoid using public wi-fi for banking apps, or when checking emails about your transaction.
- If in doubt do not transfer funds until you are sure you have verified the bank details you are sending funds to, speaking to your lawyer personally on the phone using a number you trust.
- Essentially, you should never trust details given in an email when large sums of money are involved. No-one minds a phone call to check account details.
Be careful with your money
We hope this article has been of help and has highlighted some of the risks we all have to deal with when dealing with large sums of money.Always check that you are sending your money to the right place.
Please stay VIGILANT!