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Landlords warned over large-scale property fraud scams

There’s a new warning to landlords purchasing properties about a spike in scams which have seen victims defrauded out of hundreds of thousands of pounds.

The Law Society of England and Wales has joined forces with the National Economic Crime Centre, which is housed within the National Crime Agency, and Action Fraud to issue flyers warning of the risk of payment diversion fraud.

Criminals are actively targeting property purchases, with the aim of tricking people into transferring over their house deposit and/or the balance of purchase monies to them.

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The frauds almost always involve the criminals pretending to be the victim’s lawyer to con them into diverting their payment to an account the crooks 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” says 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 buyer was scammed into handing over £640,000. 

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 - made to look like that of the solicitor - 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 these 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.

“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, as emails can be intercepted or diverted” adds Boyce.

Jon Shilland, fraud threat lead at the NECC, comments: “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.”

Want to comment on this story? If so...if any post is considered to victimise, harass, degrade or intimidate an individual or group of individuals on any basis, then the post may be deleted and the individual immediately banned from posting in future.

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    First transfer £10 then check to see that the correct person has received it, many people now do this before transferring large sums.

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    This is exactly what I do . I transfer a £1.00 test payment, followed by confirmation by the receiving end and then transfer the bigger amount

     
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    Good advice Andrew. I've been doing that for a long time with payments (even just a penny confirms the account). Quick and easy to do and could one day prevent a horror story like the one we've just read.

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    I also do a test transfer but I dont tell the recipient how much so they have to confirm receipt and let me know the amount, - belt and braces!

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    Very wise nothing wrong with the belt and braces approach in the present corrupt world

     
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    Something does not add up with these scams. The money ends up in a bank account so is traceable. If I get more than £10,000 put into my bank the bank manager is asking me where it's coming from. A friend who got caught up in one of the scams tells me £360,000 was transferred to a 19-year-old unemployed persons bank account who then withdrew it in cash! Something was very wrong with the bank who paid that money over and luckily my friend got most of the money back but it took a long time and was not easy.

    Am I wrong in believing that the fault lies with the banks? Yet The blame seems to fall on the victim. It sounds like what happened many years ago under the days of housing benefit. The system of administration was tightened up because of landlord fraud. Yes a few landlords were defrauding the system but the big frauds were all internal involving housing benefit staff yet it was portrayed as protecting against landlord fraud.

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