Conveyancing Fraud

What is conveyancing fraud?

Conveyancing or property fraud is becoming increasingly prominent in the UK, with fraudsters continually becoming more sophisticated in their strategies.

Conveyancing fraud centres around the fraudster impersonating an individual during a conveyancing transaction, in order to intercept funds.

The victim may be the buyer, seller, borrower, lender or even conveyancer and this can occur in any number of ways.

Although the strategies behind conveyancing fraud are changing all the time, there are some more common examples.

Types of property fraud

Buyers

Fraudsters may use a false ID to pretend to be a buyer making an offer before withdrawing before the exchange. They may then use the seller’s information to commit title fraud, or continue with the transaction to steal money raised from the lender.

Criminals tend to target owners considered more vulnerable, including:

• Elderly owners including those in care
• Absent owners such as landlords or those overseas
• Sole owners
• Owners who have passed away
• Owners who have built up equity

Sellers

The fraudster appearing to be the owner of a property and marketing the property through an estate agent, at auction or via the internet. An innocent buyer will view the property and sometimes even meet the fraudster. A price is then agreed and the buyer will instruct a conveyancer. It is then not until after completion when the monies are sent to the fraudster when the buyer is then unable to register the title, only to discover that the property they bought either does not belong to the seller or does not exist.

Conveyancers

The fraudster will hack into email exchanges between a client and their conveyancer. The fraudster will then send an email pretending to be the conveyancer and will provide new account details to the client. Quite often this will be at the point when the deposit is due or, even worse, when the completion monies are due.

Lenders or borrowers

Fraudsters may also attempt to impersonate those lending or borrowing money, often via false contact information.

How to identify conveyancing fraud

Here are some ways in which you can minimise your risk of becoming a victim of fraud:

• Ensure that any emails containing sensitive information are encrypted.
• If you receive a suspicious email, delete it and contact your conveyancer by telephone or in-person.
• Request your conveyancer to confirm their bank details in writing.
• Should you receive an email asking you to send funds to a different bank account then always telephone or meet your conveyancer in person to verify the new bank account.
• Before sending any money to your conveyancer, telephone or meet them in their office to verify their details.

Is my conveyancer negligent?

A conveyancer owes their client a duty of care to ensure the transaction is genuine and that they obtain the necessary ID.

They must exercise a reasonable degree of care in taking measures to protect their client’s monies from any kind of fraudulent activity.

A conveyancer holds the deposit in trust for the purchaser.

If your conveyancer sends the funds to a fraudster then they are in breach of trust by way of the failure to take care and protect the money.

The Law Society’s conveyancing Handbook for 2015 clearly warns:

“Solicitors should take reasonable precautions to ensure that sensitive information relating to bank account details which is sent to or from the client or third party by email is transmitted by a secure method, e.g. encryptions.”

We can help you pursue a compensation claim for negligence in these instances.

What to do if you have been a victim of conveyancing fraud.

You should immediately contact your bank, your conveyancer and the police. You can also come to us for legal advice on resolving the situation.