As a landlord, whether you own one property and are looking expand or you already own a whole portfolio, you need to be wary of the dangers of property scams, which are unfortunately rising in prevalence.
A new warning was recently given to landlords purchasing properties regarding an increase in scams which have seen victims defrauded out of hundreds of thousands of pounds.
Joining forces together, the Law Society of England and Wales, the National Economic Crime Centre, which is housed within the National Crime Agency, and Action Fraud distributed flyers warning of the risk of ‘payment diversion fraud’.
They say criminals are actively targeting house acquisitions, with the aim being to trick people into transferring over their house deposit and/or the balance of purchase monies to them.
The frauds typically involve the criminals masquerading as the victim’s lawyer to dupe them into diverting their payment to an account that is actually controlled by the criminals.
“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,” Law Society president I Stephanie Boyce said.
She said 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,” she added.
An example was given of one purchaser who was conned into handing over £640,000, after emails exchanged between the buyer and their solicitor were intercepted, with the criminals subsequently managing to discover all the information relating to the house purchase.
Later, they used a fake email account – which had been carefully designed to look like that of the solicitor – to ask for payment. Accordingly, payment details were then provided on headed solicitors paper via the fake email address, with the amount requested exactly what the purchaser had anticipated to pay.
Once the situation became clearer, the victim received advice from their actual solicitor that these payments had not actually been asked for. Despite this, the majority of the money was never salvaged, which meant the victim’s equity and savings were all but swallowed up in one fell swoop.
Boyce advised that buyers should be extremely vigilant if there appears to be any change of payment details. She also recommended that purchasers always double check by calling their lawyer before they transfer their money, as emails can be intercepted or diverted.
Jon Shilland, fraud threat lead at the NECC, said that payment diversion fraud is on the up and it is therefore vital to be alive to the threat as criminals are targeting home-buyers due to the scale of the transactions and the sums involved.
He said: “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.”
Fortunately, such crimes are still rare, but it’s important for property professionals and landlords to be aware of the dangers.
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