Deposit redirection
fraud and what we
can do to stop it
There is no denying that all of us are pleased that the property
market continues to remain buoyant, but similarly, is this a
dangerous time to buy and sell with the insidious rise in the
number of online scams, identity fraud and more recently the
‘deposit redirection fraud’?
There has always been a requirement
for conveyancers to remain vigilant with
a view to demonstrating utmost due
diligence and risk assessment, however
in the last six to twelve months a new
wave of property transaction crime
has been knocking on our doors and
this time it is targeting not just to the
conveyancers but the clients!
At the right time
the fraudster will
impersonate the
solicitor’s firm by
sending an email...these
emails will often look
genuine as they will be
identical to, or similar
to, that of the genuine
solicitor
80
So, what is Deposit Redirection Fraud?
Conveyancing firms and their clients
will often correspond by email in the
run up to exchange and completion
regarding deposits and completion
monies, and will usually exchange
sensitive information such as bank
details. Deposit Redirection Fraud is
where computer hackers will monitor
email communications between client
and solicitor using high tech programs
which detect certain key words. At the
right time the fraudster will impersonate
the solicitor’s firm by sending an email,
convincing clients that they must send
their completion monies to an alternative
account, offering them a ‘new’ account
number and sort code. These emails
will often look genuine as they will be
identical to or similar to that of the
genuine solicitor and quite often the
fraudsters will make an excuse along
the lines of an audit having to be carried
out by the firm as the reason for having
to change account details at the last
minute.
By manipulating the transaction in this
way the unsuspecting client inevitably
sends their deposit and/or completion
monies to this alternative account, only
to later discover that their money has
been sent to a fraudster and not their
solicitor. Not only will the client be left
with significant loss but also with a failed
completion that will require resolution,
often resulting in further loss.
Time and time again the industry is
seeing reports in the newspapers buyers, sellers and conveyancers falling
victim to this type of scam. Needless to
say, cybercrime is extremely damaging,
not only for the clients who have lost
their money but for firms who risk
their place on lender panels, risk client
confidence in their firm and their ability
to maintain the firm insured under their
indemnity insurance cover. So, what are
firms faced with doing to mitigate such
threats?
It is necessary for both lawyers and
clients to remain vigilant with electronic
communication and take the necessary
precautions to ensure that these
transactions - where large sums of
money are passed - are safeguarded.
Lawyers need to remind clients never
to include account numbers or sort
codes within emails and likewise law
firms have a responsibility to look after
their client’s money and therefore should