In the first half of 2016, there were over 1 million incidents of financial fraud in the UK – a rise of 53% over the same period last year.
And conveyancing fraud is the most common crime in the legal sector, with £7 million of client losses reported in the last year. So what can you do to safeguard your property transaction?
Most of us would recognise an obvious scam – the email from an unknown address with poor spelling and grammar; the ‘once in a lifetime opportunity’ to earn millions as a property investor. But criminals are becoming increasingly sophisticated. You may not even know that you’re a victim until you’ve lost many thousands of pounds.
Last month, The Telegraph reported the case of Mr Mingh To who almost lost his home to fraudsters. Without his knowledge, Mr. To’s £500,00 home in Stockport was put up for auction on the property website Rightmove. He was only alerted to the fraud when his daughter spotted the listing online, just 3 days before it was due to be sold.
The fraudster took utility bills from the letterbox at the end of the drive, then forged Mr. To’s signature and transferred the title deeds of the house into his own name. He has now been caught and sentenced to a 7 ½ year jail term.
But criminals don’t even have to steal someone’s identity. The Solicitor’s Regulation Authority states that the most frequent cybercrime reported to them is email hacking. Once the email chain between client and conveyancer is hacked, criminals can monitor the progress of the property transaction. They then contact the client, pretending to be the conveyancer, and ask for funds to be deposited in a new bank account. This usually happens close to completion, just at the time when the client is expecting to pay the purchase price. It’s often known as ‘deposit re-direction’ or a ‘Friday afternoon crime’, timed to take place just before the weekend when there’s less chance of it being picked up straight away.
Some properties are more at risk than others. If there is no mortgage it’s easier to transfer property title deeds as no lender signature is required. This was the case with Mr. To. and he has now made sure his solicitor’s signature is on the deeds as well as his. Empty properties are more at risk and also those where the owner lives abroad. Not everyone will be able to change their circumstances, but you can do some things to reduce your risk.
Make sure your property is registered at the Land Registry. If you have bought or mortgaged it since 1998 it will be on the register, but it’s a good idea to make sure your details are correct. The Land Registry also operates a very helpful free service – Property Alert. When you sign up you’ll receive alerts about any searches or applications on up to 10 properties. More details and useful tips here. The ActionFraud website is also full of useful information.
Check any emails you receive from your conveyancer. The difference between a genuine email and one from a fraudster may be tiny – a single digit or letter in the address. Look out for any changes in the type of language or to the footer or header images. If you are at all suspicious, speak to your conveyancer.
Our own policy is never to use email to ask our clients for bank details or to transfer funds into our account. We also run stringent ID checks and check that any funds involved in the transaction are legitimate (see our blog on money laundering).
We are always happy to explain our security measures to clients – give us a call on 0114 249 6926.