Conveyancing fraud is on the rise. Cyber criminals have become increasingly more sophisticated over the years, and the uncertain situation caused by the Covid-19 pandemic has given them a fresh opportunity to take advantage of unsuspecting individuals.
People buying homes are a major target for fraudsters because of the huge amounts of money involved. Buyers usually shell out tens of thousands of pounds for the deposit and thousands more in legal fees and third party costs. During such a stressful time, few buyers have fraud at the forefront of their minds. However, conveyancing scams can be incredibly dangerous; the Solicitors Regulation Authority (SRA) estimates that, on average, victims of conveyancing fraud lose £101,000.
So what can you do to protect yourself from conveyancing fraud? Below we provide our top tips to spot even the most convincing of scams and what you should do to avoid falling victim to fraud.
How do conveyancing scams work?
Conveyancing fraud usually occurs where someone obtains information relating to a property purchase or sale, for example, by intercepting emails between the buyer and their solicitor or by stealing someone’s personal information.
In your classic conveyancing fraud case, the fraudster will contact the buyer near completion of the purchase, usually impersonating their solicitor, and request the deposit, completion monies, or other fees be transferred into their own bank account. By the time the buyer and solicitor realise what has happened, the fraudster has taken the money and disappeared.
Conveyancing fraud can be extremely sophisticated. In one recent high-profile case, the fraudster managed to ‘sell’ another person’s property by using the owner’s driving licence and TV licence to convince a buyer and two firms of solicitors that they were the real owner. The buyer transferred £1.1 million to the fraudster who promptly had their solicitor move the money to China and disappeared. The fraud was only discovered when the buyer tried to register their purchase and HM Land Registry spotted issues with the transaction.
Has Covid-19 lead to an increase in conveyancing scams?
In April 2020, the Law Society warned that the uncertainty caused by the Coronavirus/Covid-19 pandemic has presented fraudsters and cyber criminals with a unique opportunity.
Now more than ever, buyers and conveyancers are communicating over email, putting them at risk of emails being intercepted. Buyers may be keen to progress transactions quickly to stay ahead of the ever-changing and unpredictable national lockdown restrictions making them more likely to miss signs of fraud.
Additionally, with the recent introduction of a Stamp Duty holiday to help restart the housing market after the Covid-19 lockdown, fraudsters are likely to be attracted by the huge numbers of buyers entering the market to look for their next home.
How to spot a conveyancing scam
Conveyancing scammers will usually contact their victims over email, so learning to read all emails with a critical eye and questioning anything suspicious is the key to avoiding conveyancing fraud. Even if you question a genuine email, it is better to be safe than sorry. Your solicitor will never be annoyed at you for taking steps to protect yourself.
One of the most obvious indicators of a conveyancing scam is receiving emails that are full of spelling mistakes and grammatical errors. Emails that simply read oddly or use uncommon words may also set alarm bells ringing.
However, as fraudsters get increasingly more sophisticated, you cannot necessarily rely on the odd spelling mistake to warn you. Other warning signs include:
- Receiving bank details that are different to the ones you previously used to transfer money to your solicitor (of course, this only works if you have previously successfully transferred them money)
- The sender’s email address does not match the email address on your solicitor’s website (however, it is possible to ‘spoof’ an email address)
- The salutation used to address you has changed – e.g. this email addresses you as ‘dear sir/madam’ when previously your solicitor would have written ‘dear [your name]’
- Strange requests, such as requests to pay urgent bills or additional unexpected costs (your conveyancer should never incur extra costs without discussing it with you first)
- The sender claiming that whatever they want you to do is extremely urgent
- Requests for personal information without a clear discussion about why your solicitor would need it
Our top tips for avoiding conveyancing fraud
- Trust your instincts – if an email or phone call you receive sounds odd, question it. Do not transfer any money or provide personal details until you have investigated
- Don’t feel pressured to transfer money for ‘urgent’ matters. Scammers will often use a sense of urgency to get victims to ignore their instincts
- Ask your solicitor to send you bank details or sensitive information by post rather than over email
- Call your solicitor to confirm any bank details, invoices or requests for personal information. Go to the firm’s website to make sure the number you call is correct
- If you are still unsure about the bank details, transfer a small amount of money such as £1 then call your solicitor to check they received it
- Check whether your solicitor has an online payment portal on their website that you can use to transfer money instead of trusting bank details
- Check what security measures your solicitor takes to protect their clients – e.g. any emails containing sensitive information should be encrypted which makes them harder for a fraudster to intercept and read
- Compare the email address of the sender with previous emails from your solicitor and the email addresses on the firm’s website (however, it is possible to ‘spoof’ or impersonate an email address so this is not a definite way to tell if an email is genuine)
- If someone you do not know calls you claiming to be from your solicitor’s firm, ask for their name and say you will call them back. Use the number the firm provides on their website to call back
- Make sure you fully understand the conveyancing process, the costs involved and when you will be expected to transfer money. If you receive any unexpected invoices, question these with your solicitor
Get expert advice about buying or selling your home
At Bird & Co Solicitors, we specialise in helping individuals across the country and abroad buy and sell residential property. We are national leaders in online conveyancing, enabling our clients to conduct the entire process safely online – perfect for people with busy schedules but who still want to be cautious about conveyancing fraud.
We are members of the Law Society Conveyancing Quality Scheme (CQS) for the high quality of our advice and client care.