WARNING: New cases of conveyancing scam come to light

Here is an important warning for agents, conveyancers and their clients.

On Monday, Eye ran a story about the so-called ‘Friday afternoon scam’ being practised on conveyancers with large amounts of client money in their accounts.

Fraudsters typically hack into a law firm’s systems.

This could apparently be done by the simple expediency of sending an apparently trustworthy email with an attachment.

Once clicked, this downloads malicious software and allows the thieves to intercept emails, send emails of their own using fraudulent addresses, divert huge sums of money and stop completions going through.

We now believe this could be a much more widespread problem than has been thought, and urge all agents to do their best to ensure that their buyers and sellers’ transactions go ahead without this problem.

We also urge agents to discuss it with their conveyancing partners and contacts.

Since we ran the story, we have been told of two separate cases.

We cannot disclose the details, but what both have in common is that the solicitors were informed by email, apparently from their clients, that the client had changed their bank account.

The conveyancing firms then paid the money into the “new” account, and the fraudsters then promptly emptied it out.

Both cases have happened in the last few weeks, stalling both transactions and causing an enormous amount of stress and heartache. Both transactions involved major banks.

Conveyancers, no matter how busy they are, should always beware when a client tells them they are changing their bank account. It is, after all, unlikely to happen just as a major transaction is approaching.

We feel agents should advise sellers and buyers to specifically advise their conveyancers that they will NOT be changing their bank account details. And also to be extremely circumspect as to what information they do give electronically.

It is only our view, but could old-fashioned letter writing be a better and far less risky alternative?

A final note of warning: we understand that where the solicitor’s Professional Indemnity insurer does pay up, a confidentiality agreement may be put in place.

If so, that means that we do not know the full extent of this scam.

However, for Eye to have been informed of two entirely separate cases within two days should set alarm bells well and truly ringing.

It is also the case that where insurance payouts increase, then so does the cost of Professional Indemnity – which in turn could increase the costs of conveyancing.

It seems that agents could very usefully forward this warning to all their clients and conveyancing contacts.

Eye’s first story on Monday is here

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8 Comments

  1. Keith Edwards

    I cannot understand how a conveyancer/solicitor would not double check with the client via telephone or other means that the email they received was genuine before proceeding with the transaction. After all, when they accept the instruction to act they have to have confirmation of address & ID so it’s not as if they are strangers to this sort of

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  2. Stephen Hayter

    BEWARE – we know of a case where someone has hacked into the agent’s system, and has re-issued an invoice with different bank account details.

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  3. Peter

    Never accept just an email to change bank details; we always ring clients to verify they sent the email.

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  4. Estate Agent W1

    We received a phone call yesterday from a solicitor to verify our bank details before they paid our fee via the BACS system, surely this should now become standard practice.

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  5. Blackcuckold69

    I have had this happen to me before, my uncle lost thousands on a vietnamese woman called John.

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  6. Mark Walker

    We are getting half a dozen of these emails a day, saying they are a remittance / invoice / purchase order etc.  Fortunately, thus far, our IT people seem to be ahead of the virus curve for the few that have been opened.  We have become very wary of anything coming in now.

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  7. Rob Hailstone

    I have been warning my Bold Legal Group member firms about this for a few months. Hopefully they will not get caught out. Not only can the conveyancer receive an email from the ‘purported’ client but, what is more difficult to solve, is when the client receives a dodgy email from the fraudsters (looking like it has come from their conveyancers) telling the client that the conveyancer’s bank account details have changed and that they should send their deposit/balance purchase monies to that account. It has happened, and money has gone missing.
    Warn the public also!
    Without looking like I am promoting the BLG I always update my members with any SRA fraud alerts or money laundering/ID advice that is available. What is even better, is that if one member lets me know if a fraud/scam attempt has been made, I can pass a warning on to the other members.
    Going back to post maybe a step too far but fax is more secure than emails. I am also looking into a couple of ‘encrypted’ email offerings.
     
    Go with your gut, if it feels wrong, it probably is wrong!

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  8. Jacqueline Emmerson

    Rob Hailstone is right. It’s become a daily nightmare for conveyancers. They will stay on the phone when it is thought they have hung up. They pretend to be from our regulators, they pretend to be from our banks. Members of Bold Legal are given warnings on an almost daily basis. Every week they change their tactics.

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