The Solicitors Regulation Authority has renewed a warning to solicitors about a worrying scam that targets housebuyers.
The Daily Mail has reported that newlyweds Sarah and Ritchie Tough are the latest victim of a computer scam that lost them their dream three-bedroom home.
The £45,000 deposit they spent almost a decade building up was snatched and Sarah, 28, says: ‘It makes me sick to my stomach that someone could even think of doing something like this. It was our money for our future, we had been saving for ages — and now it is gone.’
The couple, who had hoped to buy a home in Bishop’s Stortford, Hertfordshire, are the latest victims of a cruel online con that has hit homebuyers nationwide as fraudsters come up with new methods to try to dupe victims out of cash.
A computer hacker monitors emails sent by a solicitor and a homebuyer.
They look for anywhere cash transactions are discussed. In some cases, solicitors’ emails are hacked. In others, the buyer is targeted. The fraudster watches for when a bank transfer might be about to be made — and pounces.
They send the homebuyer an email which appears to be from the solicitor’s address, typically telling them that the details of the law firm’s bank account has changed.
The unsuspecting homebuyer sends their cash to the new account, where it is grabbed by the fraudsters.
In the past year alone there have been scores of instances of the crime.
It is becoming such a problem that the legal watchdog has warned its members to check their computer systems are secure and has suggested to firms that they consider encrypting emails.
Sarah, a recruitment consultant, had been dealing with their Leeds-based conveyancing firm Advantage Property Lawyers by email for weeks prior to their expected home move.
In December, she received an email from the firm asking her to transfer the £45,000 deposit for the £269,000 property. It was an exciting moment — it meant the house buy was going to happen.
But a few days later, on December 17, on her way into work in Cambridge, Sarah checked her phone and found she had received another email, apparently from Advantage Property Lawyers.
It said the firm’s usual bank account was being audited, so Sarah should instead pay the cash into a Barclays branch. It gave her an account number and sort code.
Nothing seemed amiss, so Sarah stopped at her local branch of the bank on her way to the office and paid the cash. She later received another email — apparently from Advantage — thanking her for the transaction and stating that the cash had gone through.
The couple spent the weekend excited that they would finally be able to move into their own home.
But on Monday, Sarah spoke to a solicitor from Advantage, who told her the cash had not arrived.
The solicitor said the email about the bank transfer had not been sent by them.
The bank did manage to claw back £22,000 of their cash. But the remainder of the couple’s deposit has been lost because the crooks withdrew it in three transactions at different branches in a single day.
Now the only way they will be able to buy the house is if their families can lend them the missing money.
It is unclear whether the criminals hacked into the Toughs’ emails or those of the solicitors.
A computer expert has analysed the emails and found it would have been impossible for the couple to tell that they were not genuine.
Advantage Property Lawyers has told the couple it is not liable as the fraudster must have hacked into the Toughs’ email.
Barclays also says it is not responsible for any losses as it only followed the Toughs’ instructions. The couple have asked an IT expert to conduct further tests.
Ritchie, 34, a director at a wine company, says: ‘Losing this money is bad enough. But what makes it worse is that this could have all been avoided if our emails had been encrypted. It seems crazy to ask us to transfer such huge amounts by sending a bank account number.’
The Solicitors Regulation Authority watchdog has warned of this growing scam. It says around four companies a month are being targeted by fraudsters.
Chief executive Paul Philip, says: ‘This is an issue that is not going away. Law firm client accounts are being targeted and solicitors and their clients are suffering disruption and potential loss. It is essential that firms understand the risks and take precautions to avoid falling victim to these attacks.’
A Barclays spokesman says: ‘Barclays had no way of knowing that the account would be used for fraudulent purposes. As soon as we are alerted to suspicious account activity or it is picked up by our transaction profiling work, we investigate the circumstances and if we are satisfied that the accounts are being used to launder the proceeds of crime, we act as quickly as possible to close the accounts.
‘Customers who transferred funds into the account after fraud has been detected would receive a refund.’
Advantage Property Lawyers said that the firm was not responsible for the couple’s loss.
It said its emails were not encrypted but that this was standard industry practice.
A spokesman for the firm says: ‘We have every sympathy for the Toughs — it’s a terrible situation and £45,000 is a lot to lose. We are more than happy to help with the police investigation. We checked with our internal and external IT people as soon as we discovered what had happened.
‘They have confirmed to us that there is no way our email system had been hacked in this case and the fraudulent emails definitely did not originate in our system. We stick to the highest industry standards in all aspects of our business.
‘We completed more than 8,000 conveyancing transactions last year, handling some very large amounts of money. This is the only instance of fraud we have come across. This case does, however, highlight the need for everyone to stay safe online, particularly when it comes to financial matters.”