The Daily Telegraph - Saturday - Money
Builder fraud: ‘I lost £10,800 in email scam’
First came “solicitor fraud”, where conmen intercepted emails between property buyers and conveyancers diverting huge sums to the wrong accounts. Now this form of life-destroying crime has widened out to other, big-ticket transactions, including home renovations and building work.
The scam is the same: fraudsters impersonate a party involved in the transaction and request that the payments are sent to an account controlled by criminals. And because victims of such scams tend to pay by bank transfer, which offers no protection if things go wrong, the banks are able to wash their hands of responsibility. Telegraph Money is now receiving numerous emails from readers who have discovered they have paid thousands of pounds to a criminal instead of the tradesman working on their home.
Fraudsters target building firms which may not have secure systems and could be using the same password for multiple online accounts, said Owen Quinn, a cyber security researcher at Equiniti, the technology and financial services firm. Criminals find builders’ email addresses online, and run these through software to see if there are any known passwords associated with the accounts. If they get the correct passwords, fraudsters can then access the email accounts and send emails purporting to be from the builder. By reading through previous email exchanges they can quickly find ways to trick customers into making payments to designated accounts. Emails can also be deleted. Builder invoice fraud may not involve sums as large as those with property sales, but losses can still be life-changing. Fraudsters tricked lawyer Arthur Mullinger into paying £10,800 into their Lloyds account after posing as the tradesman working on his third floor extension.
Mr Mullinger, 64, said he had been expecting an invoice and had no reason to believe that fraudsters had set up an email in the name of his subcontractor. He was in France at the time and made the payment on July 10 by bank transfer into the criminal’s Lloyds account. The fraudsters struck again the next day, this time posing as Mr Mullinger’s builder, and requested another £11,000 be paid into a Barclays account.
Mr Mullinger said he wasn’t suspicious but as the invoice came out of the blue, he waited until he returned home and spoke to the builder.
They discovered the builder’s email account had been hacked. Mr Mullinger alerted his bank, Barclays, about the attempted fraud. Later that day, when Mr Mullinger met the subcontractor who said he had yet to be paid, the rest of the scam was uncovered. Mr Mullinger contacted Barclays again and it said it would contact Lloyds to see if there were any funds remaining. He said he also hoped that Barclays would investigate the second account. However, Barclays told Mr Mullinger that as no funds had been transferred, the investigation would be limited. In a letter seen by Telegraph Money, the bank said that it could do nothing more than “apply necessary cautions and review the account”. Barclays also said it only shared information with the police if asked.
Mr Mullinger said: “The fraudster’s not just some person who’s sat there and struck lucky. They’re probably setting up hundreds of accounts that are getting past the banks’ checks. I would’ve thought Barclays would have wanted to show me it had done all it could to prevent the fraud and to stop it happening again.”
A spokesman said the bank took steps to ensure there were no loss of funds by any intended victim and information has been shared with UK Finance, which represents 300 financial firms, in order to prevent accounts being opened with the same identity. tricked by a similar scam. Mr Rogers, from Maidstone, Kent, believes fraudsters had been intercepting emails between him and the builder in charge of his extension for a while before they made their move.
It was not until the final payment of £5,872 was due that he received an email telling him the bank details had changed. Mr Rogers, 41, said he was busy at the time and thought nothing of it. He made the transfer to the new Santander account. He texted the builder two minutes later to let him know where he had paid the money but the builder did not respond until that evening. It was then that the ruse was uncovered.
Mr Rogers, who works for a fresh produce supplier, reported it to his bank, Lloyds, immediately. He also contacted Santander about its criminal customer. The bank refused to take any details and told him it would need to be contacted by his bank.
Mr Rogers, who had a crime reference number at this point, said he questioned Santander: “I remember saying: ‘Just to be clear, you are not interested in knowing that an account at your bank is being used fraudulently?’” The Santander call handler said no details could be taken. “It just goes to show the banks don’t care,” said Mr Rogers.
In both of these cases, the banks refused to reimburse the funds that had already left the fraudsters’ accounts. In both cases this was the entire sum.
However, after pressure from this newspaper, Lloyds investigated Mr Rogers’ case and found that it had delayed retrieving the money. It has agreed to reimburse Mr Rogers £5,872 (the full amount he transferred) plus £300 compensation.
Santander said it was “regrettable” that it “simply referred Mr Rogers back to his own bank” without taking any details that might have been helpful to its fraud department. It apologised to Mr Rogers and has offered £100, with no admission of liability.
However, Mr Mullinger’s bank, Barclays, said because the payment was authorised it would not offer a refund. It said it contacted Lloyds as soon as it was alerted but could not recover any funds.
Paying for your new extension via email and bank transfer could expose you to criminals, says Amelia Murray ‘It just goes to show the banks don’t care’