Home Money Buy a house? Major bank warns of rise in scams where fraudsters steal deposits

Buy a house? Major bank warns of rise in scams where fraudsters steal deposits

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Verification: Homebuyers should meet with their attorney in person to verify their payment details.
  • Scammed victims earned more than £47,000 on average, analysis shows
  • Scammers hack into buyers’ email accounts to monitor their payments

Lloyds Bank is warning homebuyers to be aware of the rise of a scam that could cost them their entire deposit, with first-time buyers particularly vulnerable.

Conveyancing scams have increased by 29 per cent over the past year, with fraudsters hacking into homebuyers’ email accounts to scam them out of their deposit payments.

Fraudsters steal an average of £47,527 from victims, Lloyds analysis shows, but in some cases criminals have stolen more than £250,000.

While conveyancing scams are much less common than other types of fraud, the bank says the average amount stolen by opportunistic fraudsters is by far the highest, and has branded it Britain’s “costliest scam” .

Verification: Homebuyers should meet with their attorney in person to verify their payment details.

The average transfer scam, which runs into the tens of thousands, dwarfs investment scams, which lose victims an average of £9,037, and romance scams where fraudsters steal an average of £6,340.

Conveyancing scams begin with a homebuyer or solicitor’s email address being hacked, after which scammers will follow up with emails related to a property purchase.

From there, they choose when to send false payment information to the buyer, which appears to come from the attorney’s email address.

In some cases, this could be from the lawyer’s real address, but in most cases scammers will spoof an address, using names, logos and signatures they have already seen in previous email exchanges.

They may even call you pretending to be the law firm.

The scam has been around for years and takes advantage of the fact that victims are in a hurry (and stressed) to get such a large sum of money to secure their new home.

Liz Ziegler, head of fraud prevention at Lloyds, said: “Buying a new home is one of the most exciting moments many of us will experience.

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‘But it can also be incredibly stressful, given the amount of money involved and the need to navigate a complex legal process.

‘While the financial consequences of these scams are serious, the emotional toll can be even greater.

“Fraud often leads to the failure of a real estate transaction, with a devastating long-term impact for those involved.”

The bank said almost half, 45 percent, of victims who reported the scam were under 39 years old, meaning scammers could be targeting first-time buyers due to their lack of experience in the buying process. a home.

Chloe, whose name has been changed, was one of those first-time buyers who was scammed out of £5,000 when she tried to transfer her deposit on a £195,000 two-bedroom apartment in Birmingham.

Chloe was waiting for her lawyer to send her the details to transfer her deposit, so when she received an email with the invoice and payment instructions a few days later, she didn’t think anything of it.

While paying the first installment of her deposit to the scammer, luckily for Chloe, the second £5,000 payment she attempted to make was blocked by her bank, who then spoke to Chloe and told her to contact Chloe’s trusted phone number. his lawyer.

Unfortunately the damage had already been done.

“Scammers take advantage of weaknesses in email security and exploit a transfer process that most people only experience a few times in their lives,” Ziegler said.

“It is vital that solicitors also understand the importance of educating their clients about the risk of this type of scam and aim to share payment details in person at the beginning of the home buying process.”

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How to avoid being scammed

Keep your email secure

At the root of the scam, making sure your email is secure is key to avoiding becoming a victim.

The first step is to ensure that your account is protected by a strong, unique password.

You can also check if your account has been involved in a data breach using websites like haveibeenpwned.com.

Look for warning signs

Bank warnings can be a nuisance when you’re sure you’re paying the right person. However, when large sums of money are at stake, it is worth paying attention to the messages.

Your bank will likely provide you with a warning if the receiving account name does not match the details you entered or if it suspects fraudulent activity.

It is best to follow the advice of your bank; any genuine lawyer will be happy for you to wait to confirm the correct details before making the transaction.

Check your payment instructions

Speaking to your solicitor on a trusted telephone number, or preferably in person, will allow you to verify that you have requested payment of your deposit and that the bank details you have are correct.

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