‘Security must be tightened’ after spate of housing deposit fraud attacks

Conveyancers and banks must tighten their security amid a spike in housing deposit thefts, victims and experts have warned.

The large volume of home purchases in recent months has made homebuyers tempting targets for scammers who trick them into sending them their deposit. Solicitors rely on telling customers they will not change their bank accounts mid-transaction, although the industry insisted this was not an effort to push the blame on to customers.

Campaigners said changes should be made to cut down on the fraud, such as maintaining a central database of solicitor bank details which banks could check and using card terminals in solicitors’ offices to transfer cash.

Until then, homebuyers risk losing their life savings. Telegraph Money has today highlighted (see page 12) the case of Eric Hatton*, who lost more than £ 100,000 when his solicitor’s email account was hacked.

The 29-year-old, who is an editor at a consultancy in London, received an email informing him that it was time to transfer the deposit he and his wife had been saving for the past eight years. He was told to transfer his funds to an account being used by the fraudsters.

Even though he carried out this transaction in a Nationwide branch, the building society did not stop him. “It was really a horrible place to be,” he said. “The stress was incredible, just a sickness in the stomach for the next 48 hours that didn’t go away, and it was hard to remain positive.”

Because he was given no fraud warnings, despite saying the money was for a deposit, Nationwide refunded him.

Savers buying a home generally send large amounts through a bank transfer. While recent developments mean banks can check that account numbers, sort codes and account names match up, this does not help if the fraud victim thinks the details are correct.

When solicitors transfer money to other legal firms, they often use a system called Lawyer Checker, a paid-for service which checks bank details are genuine. Mr Hatton said this should be used for consumer transactions, too.

Kevin Hollinrake, a Conservative MP and campaigner against scams, said more protection should be available for larger purchases. “We’re effectively funding the scamming industry, by allowing this to happen,” he said. Customers should be able to pay their deposit through a card terminal in the solicitor’s office, he added.

Fraud expert Richard Emery said a central database of bank details , accessible by banks, would help. He also said a 24-hour delay to large payments could be implemented to offer further protection to buyers.

A spokesman for the Law Society, the legal trade body, warned that genuine email accounts could be intercepted or diverted. “Clients are in particular urged to be extremely vigilant if there appears to be any change of payment details, and always doublecheck by calling their lawyer before the transfer of money.”