The Law Society of England and Wales is warning about payment diversion fraud.
Home buyers are being warned about a spike in scams which have left victims defrauded out of hundreds of thousands of pounds.
The Law Society of England and Wales is warning about payment diversion fraud – where criminals are targeting property purchases to trick people into transferring over their house deposit and/or other money used to buy a home to them.
The phasing out of a stamp duty holiday has helped to produce a surge in house sales in recent months, with property professionals reporting working long hours to help buyers beat the deadline.
The coronavirus pandemic has also prompted many people to move home as part of making lifestyle changes.
The Law Society said the frauds “almost always” involve criminals pretending to be the victim’s lawyer to con them into diverting their payment to an account they control.
“We are urging our members to share these flyers with their clients in order to help protect them from these highly sophisticated and cruel schemes,” said Law Society president I. Stephanie Boyce.
“These frauds can involve huge sums of money and have a devastating lifelong impact on the home buyer and their personal finances. Solicitors and their clients can all play a part in making such crimes more difficult for the criminals.”
One house buyer was scammed into handing over £640,000, the Law Society said.
Emails between the buyer and their solicitor had been intercepted by criminals, who were able to collect all the information relating to the house purchase.
They then used a “spoofed” email account to request payment. Payment details were provided on headed solicitors paper via the spoofed email, and the amount requested was exactly what the buyer had expected to pay.
The victim was later advised by the genuine solicitor that the payments had not been requested. Most of the money was never recovered, all but wiping out the victim’s equity and savings, and leading to the collapse of their purchase, the Law Society said.
Buyers should be extremely vigilant if there appears to be any change of payment details, and always double-check by calling their lawyer before they transfer their money, it advised.
Jon Shilland, fraud threat lead at the NECC, said: “Payment diversion fraud is increasing and it is vital to be alive to the threat as criminals are targeting home buyers due to the scale of the transactions.
“Whenever a client is making a payment to their solicitor for a house purchase, they should be highly suspicious of any change in account details or new instructions. Remind them to always check with a trusted known contact, and if they have any doubt not to transfer the money.”