Conveyancers warned of heightened fraud risk

Conveyancers and home movers have been warned about the increased risk of “Friday afternoon fraud” after data from UK Finance showed £22.5 million of bank transfer losses via the inter-bank Chaps system. The warning, which comes from the National Association of Property Buyers (NAPB), highlights the availability of an estimated 12.5m personal email account details sold on the dark web facilitating the fraud which typically sees criminals impersonating house buyers and solicitors in order to redirect sale or purchase funds.

The heightened risk can be attributed in part to the increase in remote working, according to Jonathan Rolande from the NAPB.

“It’s become a worse situation since things have become remote. Quite often, you’ll never meet your mortgage advisor, you’ll never meet your solicitor, these things are often done in call centres.

“People do play on that little bit more and also, particularly in the last couple of years, as the property market has got so frantic, everyone’s got busy and it may be that certain sort of corners are being cut by estate agents by solicitors, by purchasers or sellers themselves, just to get things done.”

The crackdown on fraud and money laundering continues with SRA Chief Executive Paul Philip telling the Law Society’s Risk and Compliance Annual Conference that solicitors play “piggy in the middle” and to expect the AML strain to increase, pointing to the increase in direct legislation which regulators have to factor into their regimes.

According to Philip the SRA will be more heavily relied upon by the upcoming Economic Crime Bill, to prevent money laundering, warning the conference that the “level of fines for economic crime, particularly in the financial sanctions era, will increase radically”

Plans for the The Economic Crime Plan 2 have also recently been released which the government says “builds on the foundations of its predecessor with new actions to improve the system-wide response to economic crime through enhanced cooperation between government, law enforcement, supervisory agencies and the private sector.”

£100m is being invested in cutting edge technology, including data analytics, to equip law enforcement with the tools they need to stay one step ahead and a new, dedicated team will be established to tackle the growing risk of fraud and criminal activity being carried out using cryptocurrency.

Friday Afternoon Fraud Reminders

  • The crime sees fraudsters targeting house deposit payments in a con that is also known as payment diversion fraud.
  • It tends to happen on a Friday as victims tend not to discover they have been conned until the following Monday.
  • Typically, it centres on hacking the email account of the house buyer or the solicitor handling a sale, then impersonating the solicitor before sending fake bank details for the buyer to transfer sale payments or deposit money to.
  • One check a buyer can make to see if their email address has been exposed in a data breach by looking it up on a website called haveibeenpwned.com.
  • Where a scammer is impersonating a solicitor, they will often use an email address that is almost identical to the genuine address, maybe changed by one character.
  • There are also reports of scammers phoning home buyers and impersonating a member of the solicitor’s accounts team and providing new bank account details where those deposits are to be paid into.
  • Jonathan advises buyers to check the bank account details provided at the very start of the process and only use that.

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