A bank account checking service has been created so homebuyers can make sure they are transferring funds to the right place when making their home purchase.
The anti-deposit fraud system, aimed at making the conveyancing process safer and more secure, is being rolled out to consumers as the financial services industry steps up efforts to combat money transfer scams.
Indeed, last month a number of banks and building societies signed up to a new voluntary code to make it easier for victims of so-called authorised push payments (APP) scams to receive refunds.
According to the Financial Conduct Authority (FCA) £350 million was lost through these types of scams in 2018.
LMS, who has developed the Bank Account Check Service, said the conveyancing process could be just as vulnerable through a crime called deposit fraud.
How fraudsters work
This is where fraudsters target both borrowers and banks by intercepting correspondence and imitating the law firm involved. The hacker then emails the target, through a process called phishing, with new bank details for the borrower to transfer their deposit.
LMS holds and maintains a secure database of bank details which borrowers can check against to ensure they are sending their money to the right place.
Nick Chadbourne, chief executive officer, LMS, said: “Deposit fraud can completely derail a borrower’s chance of home ownership, removing years of hard-earned savings in a few seconds.”
He added: “It’s a good feeling knowing LMS is actively trying to stop this type of fraudulent activity in the market.
“It’s important that the industry continues to work together to improve the home buying process at all stages, and we hope borrowers take advantage of the available technology like our Bank Account Check to offer some security against deposit fraud and mitigate risk.”
To use the checking system, buyers must have an active case with one of LMS’s panel of conveyancers.
The LMS Bank Account Check covers around 7,000 branch records and 97% of the conveyancing market.
Borrowers are alerted if the law firm’s details do not match or if they are unavailable to check against. To find out more visit LMS’s website.
