According to The Victims’ Commissioner, 4.6m people are affected by fraud in the UK each year.  While financial fraud has many guises, fraud involving property transactions is on the up affecting commercial and residential transactions. Some of this is a reflection of the global pandemic as increasing numbers of individuals use electronic systems for banking that they are not used to, or invest their money in new schemes researched whilst working from home.

There appears to be two particularly relevant forms of fraud that might affect property investors:

1. Authorised Push Payment scams (“APP”). APP frauds can happen in a multitude for ways but a common one that we have seen on the rise over the last few years is email intercepts.  Effectively, a fraudster hacks an email account and watches email traffic (often for a number of weeks or months). These fraudsters are sophisticated enough to know when substantial transactions will occur (for example in a conveyancing scenario where a deposit is about to be paid).  

Then, at the last minute, they will set up email diverts so that genuine emails from a transactional solicitor or counter-party are diverted/deleted and they will replace the emails of the genuine party with their own. Typically, this will involve setting up a fake email account with almost exactly the same address as the original (perhaps with an added letter that is difficult to spot without extreme care). The fraudsters then simply replace genuine transfer instructions with their own and wait for the money to be diverted to an entirely different place from where it was intended.  
These frauds are difficult to spot and, with the added pressure of transactional stress, are extremely profitable for the fraudsters.

2. Investment frauds. These frauds are almost as old as time but they are on the increase following the rise of arm chair investors with time on their hands and an increase in disposable cash following almost two years of reduced holidays and limited travel.