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Steer Clear of Conveyancing Fraud

Summer is traditionally the busiest time of the year for housing completions as buyers and sellers rush to follow through on transactions agreed in spring. More recently, it’s also become a bumper time for a new and lucrative type of financial crime – conveyancing fraud – and buyers need to be on their guard to make sure they steer clear of this potentially devastating offence.

Conveyancing Fraud and How to Prevent it

How it works

Conveyancing fraud is what’s known as an ‘Authorised Push Payment’ (APP) scam. In this type of scam, the victim is tricked into authorising the transfer of money from their bank account to the fraudsters.

In conveyancing fraud, criminals hack into the email chains between buyers and sellers and their solicitors and estate agents.

The fraudster poses as the victim’s solicitor. When the time comes to transfer funds to the solicitor – either for a deposit or the purchase balance - the fraudster sends the victim an email that looks like it’s an authentic communication from their solicitor but is in fact a scam email linking to the criminal’s own bank details.

As fraudsters monitor previous communications, they can make emails appear identical and delete real ones from accounts. Friday is a particularly popular day for attacks as people tend to be more relaxed as they head into the weekend.

Devastating impact

Hundreds of people have been tricked by conveyancing scams in the past few years and the losses can be life-changing.

Action Fraud, the UK’s cybercrime and reporting service, received 120 reports of conveyancing fraud between January and September in 2017. Victims lost £68,119 on average and the highest figure reported by Action Fraud was £988,0911. Conveyancing fraud is now included in the overall statistics for APP fraud and in 2018 it increased to £354 million of lost funds from almost 84,000 victims.

Protection advice

According to Action Fraud, this is a really sophisticated social engineering fraud and it can be difficult to spot.

To help protect yourself, Action Fraud suggest these measures:

  1. Get bank details from your solicitor either in person or over the phone at the start of the conveyancing process. Ask them to confirm the details by post.
  2. Always check the bank details and do not feel pressured into changing any details. If you receive an email stating a change in the bank details don’t be afraid to question its authenticity. Check the email address carefully and if in doubt use a trusted phone number to check the information is correct.
  3. Avoid using public Wi-Fi systems to check emails when house purchases are being made. Fraudsters can easily hack into vulnerable Wi-Fi systems.
  4. Avoid posting on social media about buying/selling your house or getting a mortgage. Fraudsters may get hold of this information and know the next step is a large financial transaction.
  5. Make sure you have strong passwords for your accounts and have anti-virus installed on your devices. To create a strong password, simply choose three random words. Numbers and symbols can still be used if needed.

What to do if you’re affected

Scam victims should contact their bank as soon as they become aware that they’ve been tricked and ask them to contact the receiving bank and freeze the account.

It’s also important to report the scam to the police and to log it with Action Fraud.

Claiming compensation

Unfortunately, banks are not always willing to compensate customers involved in APP scams because the payments have been authorised by the victim.

However, victims should find it easier to get their money back under a new voluntary code of conduct that came into force at the end of May.

Under the new code, banks will have to reimburse consumers for their losses provided they have taken reasonable care.

The Banking industry is also working with Pay UK to implement a new Confirmation of Payee service that will confirm the account holders name before funds are transferred to help prevent APP scams.

Stay vigilant

Conveyancing fraud is a sophisticated and potentially devastating type of financial crime. Before setting up and authorising any money transfer be absolutely sure that you’re sending your money to the correct account.

1: Included within The Telegraph, I lost £600,000 to a conveyancing scam, 18 March 2018

Paragon Bank PLC is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority. Registered in England number 05390593. Registered office 51 Homer Road, Solihull, West Midlands B91 3QJ. Paragon Bank PLC is registered on the Financial Services Register under the firm reference number 604551