Friday afternoon fraud on property transactions

Posted by Estelle Baldry on
Since 2009, HM Land Registry has prevented 254 fraudulent applications being registered, representing properties valued in excess of £117 million. No system can be completely fraud-proof, but do you know the best way to protect yourself from fraudsters?

The ruse is dubbed “Friday afternoon fraud” because criminals typically target transactions being processed ahead of the weekend or bank holidays. This supposedly limits the chance of detection.

What can you do to protect yourself?

  • Avoid email when giving or receiving payment instructions to your solicitor. As the fraudsters typically gain access to the email accounts of either the victim or their solicitor. When legitimate emails are sent between these parties giving details of bank accounts into which money should be transferred, the fraudsters alter the details so the money is sent to their own accounts.
  • If your lawyer contacts you with regards to bank details, always pick up the phone to them. Blake Morgan do not email clients with a request to change bank details and if such a request is received, you should telephone the firm for confirmation on a previously known phone number.
  • Ensure you appoint a reputable solicitor who uses an online tool to check the conveyancers on the other side of the transactions. Blake Morgan uses an online lawyer checker to gather information on conveyancers to whom we are sending money to.  This enables us to better assess the risks associated with transferring funds throughout the property transaction.

Property owners particularly vulnerable to fraud  

Those who are vulnerable to fraud should therefore take extra care during any transaction. This includes individuals who:

  • Have previously had their identity stolen
  • Rent out their property
  • Live overseas
  • Are in family disputes or breakups
  • Do not have a mortgage on the property
  • Have not registered their property
  • Own an empty property eg, holiday home owners, elderly people who have moved into care and personal representatives where the registered proprietor has died.

Owners who fall in to the vulnerable categories should be extra vigilant and take necessary steps. Registered proprietors can now track changes to the register of their property or properties by signing up to 'property alerts' from the Land Registry. By doing this, the Land Registry will then send you an alert if someone tries to change the registers to your property — for instance, to register a mortgage. This will not block the transaction from being registered, but it will alert the proprietor straight away so that if the application is not bona fide, you can do something about it. A registered proprietor can also put a restriction on their title to stop the Land Registry from registering a sale or mortgage of their property unless a solicitor or conveyancer certifies that the seller/chargor who executed the document submitted for registration is the same person as the registered proprietor.

The future

The Law Society and Land Registry are taking steps to limit the amount of fraud that takes place, but property owners should play their part by following guidance. The banking industry, including the banking watchdog the Financial Conduct Authority, has been looking into this particular type of scam so we may see more developments in the near future – watch this space.

About the Author

Photograph of Estelle Baldry

Estelle is a Senior Solicitor in the Residential Property team, experienced handling all types of residential property work.

Estelle Baldry
Email Estelle
02392 282921

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