Why you should protect your clients

Why you should protect your clients

Scams involving payments being sent to fraudsters during the conveyancing process have once again been highlighted as an issue that needs tackling.

A complaint was brought from consumer group Which?, which highlighted “push” fraud as a real problem. “Push” fraud occurs where consumers believe they are sending money to a trusted individual such as a solicitor, but are instead sending it to a fraudulent third party. Recent cases have indicated this kind of scenario as common, especially during the conveyancing process which usually involves large sums of money being transferred.

It went on to state how banks should repay any money lost in this way.

Although the Payments Systems Regulator (PSR) believed banks should take on more responsibility in these matters, it stopped short of saying they have an obligation to compensate consumers.

Where a consumer authorises a payment to a scammer, banks will largely not admit liability, commonly leaving their customer seriously out of pocket.

Appearing on BBC Breakfast last week, the PSR’s Managing Director Hannah Nixon commented on the impact of this type of fraud and how the PSR believes it can be tackled:

“Tens of thousands of people have, combined, lost hundreds of millions of pounds to these scams.

“We need a concerted and co-ordinated, industry-wide approach to better protect consumers, and we need it to start today.”

It recommended that banks should collect more data and work harder to identify any potentially fraudulent payments. Similarly, it stated that better standards of practice should be developed in order for a common approach to be used where fraud has taken place.

Nixon also commented on the growing level of efficiency that fraudsters were using, which is likely to only increase as technology develops.

Two new safeguards announced in November by the payments industry, are to be introduced in 2020 at the latest. They will apply to those paying via a banking app or online and aim to enable consumers to double check where any transferred money is being sent.

They include “confirmation of payee” where the bank will send a consumer a message to confirm the receiver’s name and “request to pay”, where the consumer will need to approve a request for a regular payment to be taken from their account.

Although these changes may add some level of consumer protection, they are not due to come into operation for several years.

The update from the PSR has meant that banks are unlikely to repay consumers if they fall victim to this kind of fraud.  It is therefore even more important that conveyancers and others involved in the property industry are aware of the issues surrounding scams of this sort. Although consumers are likely to be more alert to take care when transferring large sums of money, they are likely to require further support, and reassurance that their money is safe.

Georgia Owen

Georgia is the Content Executive and will be your primary contact when submitting your latest news. While studying for an LLB at the University of Liverpool, Georgia gained experience working within retail, as well as social media management. She later went on to work for a local newspaper, before starting at Today’s Conveyancer.

Leave a Reply

Your email address will not be published. Required fields are marked *