Homebuyers and sellers at risk of payment fraud by focusing on the wrong things

Our latest research with DigitalMove, carried out by YouGov, finds that consumers are focusing on the wrong things when it comes to payment fraud.

This is putting people at risk of losing life-changing sums of money.

Bank transfer fraud increased by 18% in 2019 according to UK Finance. This resulted in losses over the past year of £31.7m or on average £6,700 per victim. The vast majority of these scams involve the transfer of substantial sums of money – and conveyancing solicitors are the main target. Even more worryingly, only 40% of the money lost is recovered.

But our research found consumers are not as worried as they should be about conveyancing fraud. Instead we found that:

Debit/credit card fraud tops the worry list of payment fraud concerns for UK adults, with 70% saying they are personally concerned about this type of fraud. Identify theft (64%) and phishing (51%) also topped the list.
People are least worried about bank transfer fraud (42%), yet it is this type of fraud where if they fall victim, they will be less likely to recoup their losses, and could result in them losing their home.
Average credit/debit card fraud is £226 per victim; compared to £6,700 per victim of bank transfer fraud. 98% of credit/debit card victims are reimbursed; compared to 40% reimbursed to invoice related bank transfer fraud.
Although the average loss per victim for bank transfer fraud from invoice scams is just under £4,000 on average per person; the figure is likely to be substantially higher as victims will either recoup all or none of their losses.
Less than a quarter (24%) of UK adults think they are likely to be able to recover some of their funds if they are a victim of bank transfer fraud, while 71% expect to be able to recover some of their funds from credit card fraud and 68% from debit card fraud.
When asked about their concerns when moving money to purchase their home, the transfer fees charged by conveyancers (on average £20) topped their list of worries at 21%. Yet only 1 in 10 of those who purchased their home were worried about the security of payment instructions from their conveyancer/ solicitor sent by email; compared to 17% worried about making mistakes entering the bank details of their conveyancing solicitor for their bank transfer.

Paula Higgins, Chief Executive, Homeowners Alliance, says:

“There’s a lot to think about when you’re buying a home and the process is often very pressurised and fast moving. Given this and the huge sums of money changing hands it’s no wonder the conveyancing process is targeted by fraudsters. Consumers need to be wide awake to the risks and costs of this type of fraud. When appointing a conveyancer, they need to ask what security measures they have in place.”

Steve Goodall, CEO of ULS Technology, commented:

“It is well known that moving home is one of the most stressful experiences in life, but few homebuyers and sellers realise that they are at risk of fraud. More work needs to be done to raise consumer awareness of these risks and provide them with better protection.

“The DigitalMove team at ULS have been delivering technological innovations that help mitigate the risk of fraud. By encouraging consumers to use our secure online portal, we are removing the need for easily compromised email communications throughout the entire conveyancing process, and denying fraudsters access to sensitive information.

“Look for conveyancing firms that use a digital portal to provide a better experience for customers. Digital Move and other such portals are extremely useful for giving you access to your case details online, and allowing you to upload and complete forms in a secure environment. These systems will also speed up your home move legal work at the same time.”

Top tips on how to protect yourself against email fraud when buying a home

The chances of recouping your money once it has been redirected by criminals is slim. So before you transfer any money you should:

Check email addresses you are using very closely – criminals often make small changes to fool you
Talk to a conveyancing solicitor you know on the phone to confirm if a change of bank details is genuine
If you’re not sure, don’t transfer the full payment, start with just £1. Then have your conveyancing solicitor confirm its receipt before sending the remainder of the money
If you are being pushed to proceed very quickly, be careful. Criminals often use this tactic so that emails are used and corners are cut.

Top tips on choosing your conveyancer

Are they a legitimate firm? Make sure the firm acting for you is genuine by checking with the Solicitors Regulation Authority or the Council of Licenced Conveyancers.
Are they specialists? Legal practices come in many shapes and sizes, with some covering Family Law, Wills, Probate and more. You’ve got the best chance of receiving high quality customer service if you select a firm with a strong Conveyancing department.
Who will handle your case? Some firms will offer you one case handler so you have confidence that the right conveyancer is working on your behalf.
How will they communicate with you? Many conveyancing firms offer digital client portals to provide a better experience for customers. This means you have 24/7 access to your case details, as well as being able to complete and upload documents on-line.

Types of Payment Fraud

Bank transfer fraud (invoice scams) – In personal invoice scams, the victim attempts to pay an invoice to a legitimate payee, but the criminal intervenes to convince the victim to redirect the bank transfer to an account they control. It includes criminals targeting consumers posing as conveyancing solicitors, builders and other tradespeople. It often involves the criminal either intercepting emails or compromising an email account.
Debit/ credit card fraud – debit or store card details are stolen or cloned
Bank account fraud – fraudsters gain access to someone’s bank account by tricking them into revealing secure banking details through a variety of means
Identity theft – fraudsters obtain personal details through a variety of means to open new accounts, get credit or buy services
Phishing – fraudsters send emails to trick people into sharing financial and personal information or downloading malware

Kindly shared by HomeOwners Alliance (HOA)