Safeguarding your money from fraudsters during conveyancing

An increasing number of people are being defrauded on the internet. Those involved in buying and selling houses are as much at risk of falling victim to this so-called “cybercrime” as anyone else.

In fact, it appears that property professionals, such as solicitors, are a prime target for such attacks. This is due to the fact that clients regularly transfer the purchase money to their solicitors’ bank account before completion: the conveyancing lawyer is then ready to transfer that money on completion to the other party’s representative using internet banking.

Fraudsters have a number of tricks up their sleeves to obtain information about these financial transactions in advance. One such trick (known as ‘phishing’) involves the fraudster posing as someone official – for example, a bank employee - and emailing clients or solicitors to ask for financial information. The recipient, believing the sender to be trustworthy, sends the information without checking the sender’s identity.

Once in possession of this sensitive information, the fraudsters use it to divert payments to their own accounts. Unfortunately, it seems that staff at some solicitors’ firms have been tricked into arranging the transfer of money to fraudsters believing that they were transferring funds to a bank to complete a property transaction.

We at Pearsons are wise to the risks and have implemented a number of security checks to minimise the risk of falling victim to the scams – and to ensure your money is safe with us. Solicitors have a duty to carry out ‘due diligence’ when carrying out any transaction. This means we must have systems in place to safeguard our clients’ and clients’ monies from cybercrime.  For example:

• we check the identity of all our clients upon instruction and that of all those with whom we deal;
• in particular, we check the identity of the other party’s conveyancer or legal representative. This is done through an online service provided called Lawyer Checker. This allows us to gather further information on the vendor’s  conveyancer that we are sending money to. When account and the conveyancing firm’s details are submitted, Lawyer Checker will identify if there is a track record of previous use associated with that account. If there isn’t, or the account is not well known, Lawyer Checker can carry out further checks on more than 10 databases to give further information that enables us to decide if it is appropriate to send money to that account;
• we believe it is important to get to know our clients from the outset: after all, a house purchase is one of if not the most expensive purchase they will make and we want them to be comfortable with us before they hand over their money to complete a transaction;
• we explain the risks to our clients so that they are aware of the scams and advise them to be very careful about how they supply financial information and to whom; and
• we train our staff thoroughly on the risks and how to deal with them.

These procedures help us to protect your money during the conveyancing process.

To find out more about buying and selling a house, please contact us

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Please note that the information and opinions contained in this article are not intended to be comprehensive, nor to provide legal advice. No responsibility for its accuracy or correctness is assumed by Pearson Solicitors and Financial Advisers Ltd or any of its members or employees. Professional legal advice should be obtained before taking, or refraining from taking, any action as a result of this article.

This blog was posted some time ago and its contents may now be out of date. For the latest legal position relating to these issues, get in touch with the author - or make an enquiry now.