Money for nothing - A Property Article

Buying a property is the biggest purchase most people will make in their lives, with life-changing sums passing through the hands and bank accounts of conveyancers daily to facilitate these transactions. Almost certainly as a result, conveyancing remains the area of law most susceptible to fraud. The true cost of property fraud is unquantifiable, but the following figures go some way to show the extent of the problem: 

• HM Land Registry reports that between 2020 and 2025 it prevented fraudulent applications against more than 300 properties, worth over £194m. 
• The Chartered Institute of Public Finance and Accountancy studied 80,000 cases of fraud in UK local authorities and found that property fraud accounted for 71% of cases that were either detected or prevented.
• Action Fraud received 143 notifications of conveyancing fraud in the period 1 April 2024 to 31 March 2025, totalling £11.7m in losses.

These are, however, likely to be only the tip of the iceberg, and what’s clear is that reports of property fraud are increasing year on year. 

All of this is, of course, very bad news for buyers and sellers of property. It’s also far from good news for conveyancers. Aside from time, stress and hassle, a conveyancing fraud could involve complaints, Legal Ombudsman referrals, police investigations, professional negligence claims and even Solicitors Regulation Authority (SRA) referrals, not to mention the risk of bad publicity. This can then lead to increased professional indemnity (PI) premiums and increased scrutiny from insurers. Equally, in cases where the fraud results from the conveyancer’s own IT systems, firms could also find themselves at risk of a wider data breach, with potentially catastrophic consequences.

Hail to the thief

There are several types of property fraud. The classic conveyancing fraud is the ‘Friday afternoon fraud’: the fraudster hacks into the solicitor’s email accounts (typically on a Friday when, historically at least, most completions take place and a conveyancer might be at their busiest and most stressed) and sends fake bank account details for the solicitor to send funds. A similar scenario exists where the fraudster emails a purchaser purporting to be the solicitor to misdirect deposits or completion funds. The most common conveyancing frauds involve some sort of identity fraud – pretending to be a seller of a property they do not own, or occasionally even a lender, in the hope of receiving redemption monies.

These frauds can be perpetuated by techniques such as phishing, vishing and smishing – fraudulent emails / websites, phone calls and text messages, respectively. Other types of attack might include spear phishing or whaling (phishing attempts that are targeted at specific people). The rise of deepfakes can only complicate matters further.

This is by no means an exhaustive list – in fact, one of the main challenges faced by practitioners is that the inherent nature of these scams is how they change all the time. The average person is always one step behind a fraudster – you are, by the very nature of the beast, on the back foot. The fraudster generally knows to avoid leaving a paper trail and the best ways to catch the unwary off guard. 

Perhaps unsurprisingly, professional indemnity insurers have property fraud higher up their agendas than ever before. They expect to see a genuine investment in IT security, policies and training. This doesn’t mean simply providing a policy and a one-off training session and calling it a day; the most safety-conscious law firms are providing regular immersive training (such as simulated phishing exercises to see which members of staff take the bait). While such training takes time and money, the cost compared to dealing with a fraud is minimal.

It’s worth noting that claims involving property still account for more PI claims than any other area of law. Therefore, insurers are keen to ensure firms operating in this area are appropriately risk averse. Although trends in property claims come and go, these usually arise from good old-fashioned errors that could often have been avoided with greater care or better record keeping. Lack of attention to detail is exactly the sort of weak link fraudsters seek to exploit. Conversely, firms that have invested in risk management procedures can shout about this to their PI insurers when renewal comes around, which might help to smooth the process.

Danger, danger: high voltage

So, what can conveyancers do and what should they look out for?

Busy, stressed staff 

The greatest risk might simply be staff who don’t have the time or headspace to exercise adequate caution. As mentioned above, much fraudulent activity relies on basic human error or oversight. It’s impossible to avoid this completely, but you can take steps to put your staff in the best place possible to minimise the risk. 

Red flags in transactions

These can include (but are not limited to) the following:

• Urgency to complete: of course, transactions can be genuinely urgent, but be wary of any pressure to move at a particularly unusual speed, or dramatic or overly emotional claims of missing an opportunity.
• A mortgage-free / cash purchase: the buyer may just be sufficiently rich not to require a mortgage, but this is less common. 
• A price that looks too good to be true:  we all love a bargain, but is there a reason for the sudden drop?
• Lack of concern about any issues identified in the investigation stage: this is, after all, not the sort of purchase one makes on a whim, so why would the buyer not be worried about legitimate concerns? 
• Alterations or inconsistencies in names, email addresses or company information: a change of email address, purchasing entity or even just spelling mistakes could indicate an imposter.
• Emails from unexpected parties: a changing cast list is not a director’s dream in this scenario.
• Change of bank account details: most people will avoid changing bank accounts mid-property purchase like the plague.
• Invisible sellers: it’s increasingly common (particularly post-Covid) not to meet your client face to face, but any client refusing calls or face-to-face video meetings should ring alarm bells. Fraudsters often hide behind email communication, as this is far easier to manipulate. 

Addressing concerns 

It’s far better to ask a ‘silly question’ than fail to challenge a serious issue. Similarly, encouraging staff to hold up their hand when they identify an issue is vital – sometimes funds can be recovered or damage limited if the problem is discovered quickly enough (which applies to any mishap by a solicitor).

Training

As mentioned above, the importance of regular training for all staff cannot be underestimated. Make sure staff are also aware of the importance of completing updates on any devices as quickly as possible – in most cases, the updates are designed to fix an identified security loophole rather than implement any fancy new features.

Bank account transfers

Always double check bank account details by contacting the relevant individual by telephone or, even better, in person. Do not accept email only. Make clear in your literature and correspondence that your bank account details will not change during the transaction. You could also consider sending a small ‘test’ sum to the intended recipient to ensure it reaches its correct destination before sending the full amount. Ask for bank account details at the beginning of the transaction, when there is less pressure and more opportunity to check them properly, rather than on completion day.

Policies

Due diligence, know your customer (KYC) and anti-fraud policies and processes should be kept under regular review, with staff reminded to reread these at appropriate intervals.

KYC

Naturally, care should be taken to perform KYC procedures on your own client. However, as an extra precaution, consider undertaking these on the seller too if you are acting for the buyer, as well as obtaining appropriate undertakings from the seller’s solicitor.

Social media

Advise your clients not to post on social media about moving or selling their property, which could make them a target for fraudsters. 

Red alert, red alert: it’s a catastrophe

Sadly, mistakes can and do happen, however vigilant you might be. But don’t worry, and don’t panic. There are several steps you can take if you do spot fraud:

• Act quickly – there is no substitute for a speedy response. While the most likely outcome is that the horse has bolted, you may be able to close the stable door just in time.
• Get on the phone – there are a number of reports you need to make as soon as possible:
  • Report the matter to any relevant bank. 
  • Call the police and / or Action Fraud. Even if the latter does not result in any success, it may assist with part of wider investigations, and your PI insurers will likely require details of your efforts to resolve matters, including a crime reference number. 
  • Alert your PI insurers as soon as possible. 
  • Report the matter to the SRA – the fraud may constitute a breach of its Accounts Rules. This would also mean that the client account would need to be reconstituted, in which case your PI insurer may need to become involved (see above). 
  • You may need to report the matter to the Information Commissioner’s Office if you consider personal data could have been breached.
  • Contact your IT team or provider – any individuals involved should change their password as soon as possible, but there may also be wider security implications for the firm.
  • Inform your client (if they did not alert you themselves) – however painful, you need to let them know immediately, particularly if there is any risk that their own IT or bank account may have been compromised. You may also need to advise them to take independent legal advice.
• Continue to keep an eye on your bank statements in case of any repeat attempts – fraudsters often return to the scene of crime and may, for example, perpetuate the scam by claiming they wish to help you recover any missing funds.

Last word

Property fraud is becoming increasingly sophisticated, but strong processes, consistent training and a questioning mindset remain the best defence. By staying alert to red flags and acting quickly when issues arise, conveyancers can better protect clients, limit exposure and reduce the likelihood of serious loss.