The business of buying and selling property is one fraught with risk. The buyer faces the possibility of being outbid by another buyer. They might end up spending many thousands of pounds on a house that’s got serious defects if they fail to get a structural survey done. Meanwhile, the seller could be left high and dry if they accept one offer but that buyer then withdraws at the last minute.
All of those possibilities are clear to both parties before embarking on any sale deal. However, another, more worrying risk is the one hovering in cyberspace – digital fraud that diverts the funds from the buyer or to the seller by hacking into the email accounts of either the conveyancing firm or the individuals involved, and sometimes both.
In the UK property market, millions of pounds change hands every single day as sales are completed, making this area an enticing one for thieves looking for an easy mark.
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£7m cost of ‘Friday afternoon frauds’
In the year to December 2016, around £7 million was defrauded from individuals in the UK during the conveyancing process, a scam dubbed “Friday afternoon fraud” because of that day’s popularity as a completion date – and also because it gives the tricksters time to make off with their ill-gotten gains.
The Solicitors Regulation Authority (SRA) is the regulating arm of the Law Society of England and Wales and the body to which all members of Homeward Legal’s nationwide panel of solicitors and conveyancing solicitors report.
In its December 2016 report, the SRA said three-quarters of the cyber crimes reported to it in the previous 12 months had been “Friday afternoon frauds” but also said the problem may be under-reported. A quarter of firms under the umbrella of the SRA have been targeted by fraudsters with one in 10 having money stolen from their clients.
While technology is helping to speed up the conveyancing process, a lack of digital knowledge and awareness of the extent to which fraudsters can penetrate an email system makes both buyers and sellers vulnerable to the scam. The SRA advises only confirming bank details in writing using the traditional postal system.
Conveyancing firms and solicitors are also more vigilant now in ensuring identity fraud is minimised, carrying out documentation checks to confirm that a seller or a seller’s solicitor is indeed who they say they are and entitled to sell a property.
Digital safety now a priority
The “digital safety gap” has been identified by Barclays in its Digital Safety Index survey, published this month. The research from the financial giant showed that fraud and cyber crimes now make up half of all recorded crime in the UK, but many people have no idea how to ensure they can keep their finances safe online. In fact, the Barclays survey revealed that even the most highly educated individuals are no better at identifying digital threats than the rest of the population.
To combat this ignorance, Barclays is to set up digital safety teach-ins in branch to customers and to the businesses it serves.
Homeward Legal puts the safety, security and confidentiality of its clients first, and our solicitors and conveyancers panel are regulated by the Law Society through the SRA (for solicitors) and the Conveyancing Quality Scheme (CQS) for conveyancers. We also offer a guaranteed fixed fee and the assurance that you won’t lose a penny if for some reason your transaction doesn’t complete.
Read more here on why using Homeward Legal can provide peace of mind for buyer and seller.