Urgent warning about fraudsters exploiting the conveyancing process

It has come to my attention that fraudsters have identified the fact that there are opportunities to cause funds associated with conveyancing transactions to be diverted to their own bank accounts. These fraudsters are very cyber savvy and plainly have access to information regarding specific conveyancing transactions which enable them to impersonate, in a credible fashion, one or more of the role players in the conveyancing process.

Where and how they gain the information regarding the transaction is not yet known but it could potentially emanate from any number of sources including the municipal authority, SARS, the financial institutions dealing with mortgages associated with the transaction or even by hacking into the email accounts of one of the role players in the transaction. Nevertheless these fraudsters are able to cleverly generate emails and/or letters which appear to come from one of the parties in the transaction (i.e. either the conveyancers or the estate agents or the buyer or the seller, etc.) but which do not really come from that party at all.

The sender’s email address will in all respects look normal but will in fact be a disguise for the fraudster’s true email address which lurks unseen below the surface. In other words and by way of example, let us assume that the seller in a conveyancing transaction is named Peter Piper and that his genuine email address is PeterPiper@yahoo.com. Let us also assume that this email address is known to the conveyancers and accordingly recognised as the email address of their client Peter Piper. The fraudsters are able to cause an email to arrive at the conveyancers which appears to come from PeterPiper@yahoo.com but which in fact doesn't! The real address from which the email comes is hidden. If the email contains instructions to the conveyancers to pay the proceeds of the sale of the property belonging to Peter Piper into a named bank account which does not belong to Peter Piper the conveyancers could be fooled into doing so. Examples of this nature could be repeated in exchanges with the estate agents who hold deposits from the purchaser and the purchaser who is obliged to make payment to the estate agents or the conveyancers.

It is therefore vital that all parties (especially conveyancers, estate agents and purchasers) to a conveyancing transaction be alert to this new scam and that all parties who plan to transfer funds by EFT to the bank account of one of the other parties in the transaction verify the banking details of the other party before doing so. Any mail or other correspondence which changes banking details “at the last minute” must be viewed with particular suspicion.

NEWSFLASH The Conveyancers
Milton Koumbatis
Miltons Matsemela