Spring has sprung and with it so has the property market. Property market data for the week 15 May to 21 May inclusive shows that it was the best week for residential house sales since the summer of 2022 and the best for listings since April 2021. So, whilst interest rates are rising, so are sales.
Rising sales means more transactions, and the more transactions there are, the more potential victims of conveyancing fraud. Scammers seeing only opportunity as the market gets busier.
What is Friday afternoon fraud and how do criminals execute the scam?
Conveyancing fraud is often referred to as ‘Friday afternoon fraud’ because most property sales complete on a Friday.
Typically, scammers hack into emails between conveyancers and homebuyers and effectively hijack the process.
Once they have identified a suitable victim, they will remain dormant until just before exchange of contracts or completion, when a large sum of money may be due to be passed from the buyer to their conveyancer to fund the purchase.
At this point they will send a fake – but genuine-looking – email to the homebuyer appearing to come from their conveyancer. It will contain revised bank account details for where to send the deposit.
Once the unsuspecting homebuyer transfers funds into this fraudulent account, the fraudsters then empty it and close it down.
By the time the buyer realises that something is amiss, the criminal will have already quickly transferred the money to numerous other accounts, often abroad, where it is then cashed out.
Because the victim has been tricked into authorising a payment to a fraudster, the customer’s bank has to act on the instruction and so the victim is ultimately liable.
This differs from when a payment is made without the authority of the customer and the bank is liable for the cost of the fraud.
These are referred to as authorised push payments (APPs) and the fraud method is not just limited to email. Payments can be asked for and made over the phone or in person, and most are completed instantly.
In its most recent annual report, released in May, UK Finance reported that over £1.2billion was stolen by criminals through authorised and unauthorised fraudulent payments in 2022, equivalent to over £2,300 every minute. The report also detailed that 78% of APP fraud cases start online and 18% start via telecommunications.
How to reduce the chances of being stung by conveyancing fraud
While none of us like to imagine this happening to us, the sums involved in these scams can be devastating. Fraudsters prey on the time pressured nature of exchange and completion to unsettle their victims and rush them into making errors. Never feel pressured to transfer money if something doesn’t feel right.
Your conveyancer will have information available on the procedures they have in place to help clients avoid falling victim to scams. Do ensure you ask about this, no question is too silly.
Secondly, you cannot be too cautious when transferring large sums of money. Never rely on details sent to you via email. Always ensure that when it is time to transfer money you contact your conveyancer directly on the telephone, on a number you know to be correct, to confirm bank details.
It may seem like a hassle, and there can often be time pressures close to completion, but not taking the time to do this has resulted in heartache for many who have discovered they have lost large sums of money to scammers.
Are there any other ways you can protect yourself?
Follow the Stop, Challenge, Protect maxim:
Stop: Taking a moment to stop and think before parting with your money or information could keep you safe.
Challenge: Could it be fake? It’s ok to reject, refuse or ignore any requests. Only criminals will try to rush or panic you.
Protect: Contact your bank immediately if you think you’ve fallen for a scam and report it to Action Fraud.
You can access guidance here, and if you think you have been scammed, contact your bank immediately and report it via the Action Fraud website or by calling 0300 123 2040.
Stephen Ward is director of strategy and external relations at the Council for Licensed Conveyancers
