It is often the ‘big ticket’ and ‘successful’ fraudulent acts which make the headlines for obvious reason, but we all have to understand that such acts are just as likely when the amounts are in the tens or hundreds of thousands, let alone multiples of this, and there are many more attempts made which do not achieve their ends.
Fraud is therefore a constant threat because of those sums and the fact they have to ‘change hands’. Plus, the fact that homes fetch such vast amounts, fraudsters are always going to be looking for potential ‘weak spots’ in the process or ‘weak people’ who can be influenced to do their bidding.
Just recently, the National Association of Property Buyers (NAPB) highlighted data from UK Finance showing there was £22.5m of bank transfer losses via the inter-bank Chaps system.
Plus, approximately 12.5m personal email account details were sold on the dark web – a big issue in ‘Friday afternoon fraud’ in the property market where fraudsters pretend to be solicitors or conveyancers and attempt to have deposit money redirected to their accounts.
How advisers can protect themselves
There is, therefore, a two-pronged approach for advisers to follow, in terms of both protecting themselves from potential fraudsters but also their client base from being victims.
First up, is protecting yourself from – however inadvertently – being the conduit for those seeking to perpetrate mortgage fraud.
In a world in which it is increasingly less likely that you’ll be seeing clients face-to-face, where you might believe you would get a better feel for anything which looked suspicious, there is clearly a need to be extra vigilant in ensuring an individual is who they say they are. Also, confirming they are the owner of the property, and that everyone else working in the chain is legit and above board.
There will be severe consequences for advisers who send in false statements or documents to lenders even if they believe them to be above board, or if they accept ID documents which are false.
You could effectively lose your livelihood if this happens more than once, even if the documents are very good fakes. Lenders have a lot to lose by allowing such cases to work their way through systems, plus they will share this information with others which is likely to impinge on your ability to place business.
How advisers can protect clients
Then there is also client protection.
Even those who may have already been through the process before could become victims of fraud if they are not vigilant. The NAPB suggests there is now a heightened risk because people are less likely to have had direct personal contact with those key firms in the chain, particularly conveyancers, plus there is more opportunity to do this because of remote working.
Also, in a busy market where there is a lot to keep track of and where there can appear to be a limited amount of time to get ducks in a row, clients might not pay as much attention as they should, and such a mistake could end up in a horrific outcome.
So, please make clients aware of the potential for their emails to be hacked, particularly if they have been on social media, for example, talking about any ongoing house purchase – that should be a no-no.
Also, make them aware that genuine conveyancers will never contact them about a change of bank account details, and if they do get such an email, they should phone their conveyancing contact and only ever send a small amount of money in the first place, rather than the whole amount.
Be vigilant at all times
You’ll no doubt be fully aware of those headline cases where full transfers are made and, even if it’s noted straight away, it will be too late. Also, be aware that the source of the fraud might not come through email – there have been cases of scammers impersonating the conveyancer over the phone, telling them of changed details, and securing the money this way.
A client should check the details they are provided at the start of the process, and keep checking all the way through if they are told those details have changed – and let’s be 100 per cent clear, they won’t change.
Even if a conveyancer wants to open a new account they can still use their old account for existing clients.
Overall, it’s an ongoing threat which requires ongoing vigilance on all our parts. Try to minimise and mitigate the risk for both you as the adviser and your clients from the outset.
