“Friday afternoon fraud” is costing homebuyers millions of pounds every year, the Law Society for England and Wales has warned.
The notice comes as reports of payment diversion fraud soared in the year to September 2021.
Payment diversion fraud – also known as Friday afternoon, business email compromise, or mandate fraud – involves criminals contacting a business or customer pretending to be an employee from a company that the victim has been dealing with.
In the legal profession, this may involve a fraudster creating a fake email address similar to a genuine law firm’s and asking a homebuyer to make payment for a house.
As the client was expecting to make a payment, they are often tricked into handing over tens or even hundreds of thousands of pounds to a bank account controlled by the criminal.
According to the latest data available, there were more than 4,600 individual cases of payment diversion fraud reported to Action Fraud in the 12 months to September 2021.
The individual loss per victim was a jaw-dropping £30,000.
Commenting on the figures, Law Society president I. Stephanie Boyce said: “We are urging our members to share these flyers with their clients in order to help protect them from these highly-sophisticated and cruel schemes.
“These frauds can involve huge sums of money and have a devastating lifelong impact on the home buyer and their personal finances. Solicitors and their clients can all play a part in making such crimes more difficult for the criminals.”
Jon Shilland, fraud threat lead at the National Economic Crime Centre, added: “Payment diversion fraud is increasing and it is vital to be alive to the threat as criminals are targeting home-buyers due to the scale of the transactions.
“Whenever a client is making a payment to their solicitor for a house purchase, they should be highly suspicious of any change in account details or new instructions. Remind them to always check with a trusted known contact, and if they have any doubt not to transfer the money.”
How can I protect clients from payment diversion fraud?
Action Fraud, the UK’s national fraud and cyber crime reporting centre, warns individuals to “stop, challenge, and protect”:
- STOP: Taking a moment to stop and think before parting with your money or information could keep you safe.
- CHALLENGE: Could it be fake? It’s ok to reject, refuse or ignore any requests for your financial or personal details. Only criminals will try to rush or panic you.
- PROTECT: Contact your bank immediatelyif you think you’ve fallen for a scam, don’t feel ashamed or embarrassed – you are not alone.
For help and advice with related matters, please get in touch with our legal finance team today.