The latest conveyancing scam has seen a mother and daughter tricked out of their life savings. Jill and Nikki Douthwaite from Kent have lost £113,665 after unknowingly transferring funds to a criminal, rather than their solicitor.
The family was in the process of buying a Cambridgeshire bungalow via a solicitor at Dollman & Pritchard when the scam took place. On September 19, they noticed that an email asking them to transfer a 10% deposit into an alternative Santander account came from a slightly different address than usual. Concerned, the Douthwaites checked with their solicitor before sending the payment, emailing both addresses to confirm that the new contact and bank details were legitimate.
According to Nikki Douthwaite, Dollman & Pritchard verbally confirmed that it did have two email addresses and that the bank details supplied were for its “Client Conveyancing Account”. Following this confirmation, the family transferred £18,200 to cover the requested deposit.
A few days later, the Douthwaite’s received an additional email requesting that £45,455 be paid into an HSBC account to speed up completion. While they attempted to make this transaction via Barclays, it was blocked by the fraud department and a call was made querying the transfer. To ensure the house purchase went through, Jill Douthwaite paid the funds into the same Santander account as before. Following further email exchanges with their “solicitor”, the Douthwaite’s also paid the remaining £50,000 into the Santander account.
However, when Jill contacted her solicitor to find out when completion would be taking place, she was informed that only an initial payment of £1,000 had been received.
While Barclays, Action Fraud, and the police have been contacted, the banks involved claim no liability. It appears that because the victims authorised the payments, the Douthwaite’s are left with little recourse. Unable to go ahead with the purchase of the bungalow, the women – along with their six cats and two dogs – are now homeless and living with friends.
The problem of transfer fraud (also called push payment fraud) is increasing in the UK, with victims losing £100m in just six months. In such scams, victims are tricked into making payments into the accounts of criminals. In response, there are mounting calls for banks to take more responsibility for the losses of victims, particularly where they provide accounts to fraudsters.
A long-awaited report that sets out draft proposals to help victims was made public earlier this month. The regulator is considering a “reimbursement model” which if launched, would apply from September next year. Under this approach, victims would only be eligible for reimbursement where the fraudster’s bank has not met the “required standards” or where the victims themselves met the “requisite level of care” or could not have “reasonably” prevented the scam.
However, experts have deemed the plans, which are unlikely to be mandatory, as “too little, too late”. Indeed, even if these proposals were already in force, it is doubtful that they would help in this case.
Commenting in The Telegraph, head of investigations at Requite Solutions, an organisation which works to recover assets for fraud victims, and former Metropolitan Police detective Suzanne Raftery states that she believes that Santander has questions to answer for facilitating the fraud. She said: “Where have the funds gone? What was the genuine account name? Questions need to be asked concerning the type of account that received and dispersed these funds. Has the account holder been spoken to?”
Victims of transfer fraud can apply to the High Court to order banks to reveal details about fraudulent accounts. However, there is no guarantee that this will lead to the criminals being found and the funds being returned.
Solicitors may also be liable if they did not do enough to protect their clients and are found to be negligent. The Solicitors Regulation Authority has made frequent warnings about online scams, with conveyancing scams the most common cybercrime in the legal sector. However, the SRA believes that firms are still failing to do enough to protect client money and assets.
