Following the latest guidance from HM Land Registry (HMLR) and the anti-fraud measures introduced by the Council for Licensed Conveyancers to help protect all parties in the home-buying process, Owen Derbyshire, CEO and co-founder of Properr Software (creators of TrackMyMove.com), explains how the ‘simple’ scam fraudsters are using to trick home buyers out of thousands of pounds can be avoided with the help of PropTech.
PHISHING FOR MONEY
It’s not a new phenomenon. Fraudsters are driven by greed, and any opportunity to make maximum profit for minimum effort is where they thrive. The house buying market is a lucrative target for fraudsters; large sums of money change hands, meaning prospective new homeowners – who are often making the most expensive purchase of their lives – are particularly vulnerable.
Last year clients across Englnd and Wales lost £7m in cyber attacks.
Fraudsters operating in the property industry are big fans of a phishing scam, where they fraudulently pose as trusted solicitors or agents. One way this can happen is when customers are logged into insecure, non-password-protected public WIFI networks. Data shared via these insecure networks are easy for hackers to hijack.
Email messages appearing to come from the legitimate source either direct you to a fake website, asking you to divulge private information such as payment details or passwords, or give ‘new’ bank details to transfer money to. Either way, the fraudsters are often able to steal a large amount of money from the unsuspecting customer.
These scams have become increasingly sophisticated in a bid to trick increasingly savvy consumers. Intercepted emails might be followed up with a telephone call from scammers claiming to be from the bank’s counter-fraud team – lulling buyers into a false sense of security. Similarly, law firms have been called and asked for verification of a specific electronic transaction, with fraudsters asking them to confirm online security information.
Leaving no stone unturned, fraudsters are going to considerable lengths to impersonate conveyancers, even forging letterheads and signatures in written communications to mislead the buyer into sending money to them.
Last year clients across England and Wales lost £7million in cyber-attacks on law practices last year, with most scams involving conveyancing the Solicitors Regulation Authority (SRA) revealed, and according to statistics from the National Fraud Intelligence Bureau, the number of deposit redirection frauds in March 2016 was more than triple those in March 2015.
NEW MEASURES – IS IT ENOUGH?
At the start of the year, the Council for Licensed Conveyancers (CLC) introduced a ‘secure badge scheme’ to help minimise the risk of firms being impersonated online. The CLC badge is installed on the conveyancer’s website and designed to be impossible for fraudsters to forge. The badge will take the consumer to the Council’s website where further information on the licensed firm is available.
The deadline for conveyancing firms to comply with the scheme was 1st November 2017 and while it’s certainly a step in the right direction, it’s not a fail-safe against all forms of fraud. Scammers are constantly on the look-out for weaknesses to exploit, and as one avenue closes, they will turn their attention to another.
The badge helps consumers verify licensed conveyancers approved by the CLC. The scheme does not cover solicitors regulated by the Law Society. And of course, the consumer must know about the scheme and remember to check for the badge – all too easy to forget during the stress of moving house.
HOW CAN PROPTECH HELP FIGHT FRAUD?
The ever-evolving world of fraud means it’s crucial to adopt a coordinated approach to identity verification and fraud protection. Applying piecemeal measures to defend against individual threats feels rather like shutting the stable door after the horse has bolted.
Having a clearly established communication process minimises potential loopholes for fraudsters to infiltrate and makes it much easier to verify that communications are genuine. Our platform, Track My Move, brings everyone involved in the home selling process – including buyers, sellers, conveyancers and solicitors – into one place, thereby cutting down on these sorts of attacks.
On top of that, we are continuously researching and introducing new audit measures and identity verification procedures, which will add another dimension of security to the home moving process. It’s important to try to stay one step ahead, providing layers of protection without compromising the overall experience for the customer.