New computer scam costs newlyweds chance of a new home

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.”

Landlords could fall foul of new legislation if they fail to take note of Assured Shorthold Tenancies law

The Deregulation Act 2015 came into force on 26th March, 2015 and extended the necessity to protect deposits on Assured Shorthold Tenancies granted before April 2007, as well as, providing Landlords with an amnesty period to retrospectively protect any deposits that they held by 23rd June, 2015.

So, if a Landlord took a deposit on a tenancy since 6 April, 2007 and protected and served the Prescribed Information, and the tenancy has since either rolled into a Statutory Periodic Tenancy after the fixed term of the tenancy expired or been renewed, then as long as the deposit is still protected in the same scheme and the tenancy details have not changed, the Landlord will be deemed to have complied. In other words, this specific change overturns the Court of Appeal decision in Superstrike .v. Rodrigues.

The clarification in the law provides more protection to Landlords who could, up until the change, be faced with a fatal defence to their possession claim if they had failed to serve the Prescribed Information upon their tenants at the time of the initial tenancy and at the time each replacement tenancy was entered into.

If the Statutory Periodic Tenancy has ended before 26 March, 2015 or, the whole deposit is no longer being held before that date, the Landlord is viewed as having complied with the requirements of deposit protection within the appropriate time-scales and there are no penalties for Landlords in those circumstances.

If a Landlord took a deposit on an Assured Shorthold Tenancy before April 2007, it subsequently rolled into a Statutory Periodic Tenancy or it was renewed after April 2007 and the tenancy was still in existence on 26th March, 2015, then the deposit must have been protected and Prescribed Information served by 23rd June, 2015. A landlord will not be able to serve a Section 21 notice and WILL be liable for financial penalties for non-compliance until they have protected the deposit and they may not be able to recover possession from the tenant.

In addition, the fact that the changes have a retrospective effect also mean that landlords who have recently had their possession claims dismissed could take steps to appeal that dismissal.

Despite the changes, it is important to remember that there must have been some protection originally and the correct Prescribed Information given for this to apply. So, if a Landlord failed to give correct Prescribed Information originally, they will have also failed for each renewal or Statutory Periodic Tenancy.

There is no change to the current rules that Prescribed Information can be given late to allow service of a section 21 notice but the Landlord can face a penalty of between one and three times deposit plus return of the deposit which they could be ordered to pay if the tenant applies to the Court for compensation.

The final change (which isn’t in relation to Superstirke) allows the agent’s details to be used on the Prescribed Information where they have taken and protected the deposit on the landlord’s behalf. Previously there was doubt as to whether the agent’s details could be provided instead of the landlord’s when the agent took the deposit and protected it on the Landlord’s behalf.

For further advice and information please contact Sallyann Vipond on 0161 928 9321.

Contentious Probate in the News!

The Court of Appeal has awarded an estranged daughter the substantial sum of £164,000 from her late mother’s estate after contesting a will, in a decision that has garnered considerable press attention. The Court of Appeal’s decision has confirmed the rights and ability of children cut out of their parents’ wills to bring a claim for reasonable financial provision.

The Claimant, Heather Ilott, eloped at the age of 17 with her boyfriend, Nicholas. Despite Heather and Nicholas later marrying and having five children together, Heather’s mother Melita never forgave her for eloping and when she died divided her estate between three animal rights charities with whom she had little previous connection. Melita left notes (or “Letter of Wishes”) with her will, explaining that she had deliberately cut her daughter out of her will and why.

Heather brought a Contentious Probate claim for reasonable financial provision against her mother’s estate. Relatives or dependents are entitled to bring such claims under the provisions of the Inheritance (Provision for Family and Dependants) Act 1975.

The case was initially heard in 2007 and Heather was awarded £50,000. Heather challenged the will and appealed on the grounds that the original award was too low. The value of her mother’s estate was nearly £500,000. The charities cross-appealed and the Court found against Heather and that she was entitled to nothing. Heather appealed again.

The latest hearing was the fourth time the case has been before the courts. The Court of Appeal found that Melita had acted in an ‘unreasonable, capricious and harsh’ way towards her daughter. They took into account Heather’s desperate financial circumstances – she lived on benefits in a council house and struggled to afford clothes and food for her family. The Court was told she had never taken a holiday. The Court also heard that Heather had tried to reconcile with her mother before she died but without success. Ultimately they decided Heather should be awarded £164,000.

A lot of press commentary has focused on concerns about people being unable to dispose of their property as they wish on death. However, the ruling confirms rights for relatives and dependents that have developed in legislation and case law for decades. The decision will give comfort and security to estranged adult children who face difficult financial circumstances and have been ostracised by their families for reasons that are often not their own fault.

Our contentious probate team have many years’ experience of working with clients in similar circumstances both to Miss Ilott and the Estate. Our substantial experience of acting on both sides of the fence in such cases allows us to advise and guide our clients through difficult circumstancess such as these. We endeavour to work sensitively with clients who have been cut out or not reasonably provided for under a family member’s will. Often a client will only be seeking what is deemed to be reasonable (i.e. what they are entitled to), and not the entire estate. As in Heather Ilott’s case, two thirds of the estate still passed to the animal rights charities chosen by her mother. We also have considerable experience of acting for Estates when defending such claims.

Claims are complex and require expert advice from a suitably experienced solicitor. It is crucial to take advice and at an early stage – strict and very short time limits apply in these cases. Any right to claim may be lost if a claim is not settled or court proceedings not issued before the deadline.

If you would like to discuss your case with our expert team then please contact us on 0161 928 9321.