Harrowells’ fraud-busting team aims to tackle the criminal gangs

But imagine how fraught it becomes when you find a criminal gang has run off with the cash you’d set aside to purchase the home of your dreams. This scenario is not as far-fetched as it might sound.

Residential property lawyers at Harrowells Solicitors plan to flush out bogus lawyers from criminal gangs who divert funds away from house purchases at the last minute.

The residential property team at Harrowells, which is based in York, has implemented new ‘fraud-busting’ procedures to tackle the threat posed by highly-sophisticated gangs, who have hit London and several other major cities.

According to Harrowells, several cases involving millions of pounds have come to light, where criminals have used techniques that have included hacking into the email accounts of solicitors acting for home buyers and sending bogus emails, stating which bank account payment must be sent to on completion.

Only when the transaction has failed have the homebuyers and solicitors found that the emails and bank details were false, and that their cash was diverted, leaving them worse off and potentially homeless if their own property has been sold.

The 24-strong residential conveyancing team at Harrowells, which acts in hundreds of house sales and purchases each year throughout the UK and overseas, has launched a new due diligence process in an attempt to flush out the criminals at different stages of the transaction.

Under the new procedures Harrowells is supporting house buyers by obtaining details of the bank account of the seller’s solicitors at the start of the transaction.

Harrowells residential conveyancing operations manager, Janet Rhodes-Blangsted, a former lawyer with London-based international firm, Herbert Smith, said: “By investigating the other law firm’s bank accounts at the start, we can look for inconsistencies such as if the account shows low activity for a firm with a large residential property department.

“We also study the track record of any previous use associated with that account in detail and, if the results show the account is previously unknown, or with irregular usage, then this could be suspicious.”

Ms Rhodes-Blangsted said that if questions are raised about an account, further checks of more than 10 databases can be made to look at numerous aspects of its activity including trading names, location and professional accreditations.

Checks are also made to ensure that there are no conditions, such as not being able to handle client monies, against solicitors listed as practising at the office searched.

She added: “We repeat this process just before the day of completion.

“As criminals are increasingly turning towards cyber-crime we want to ensure our clients’ monies are secure and limit our chances of any fraudulent transaction taking place as high street banks and solicitors have been subjected to these types of cyber-attacks. These criminals are very clever and we are applying these defensive measures so we are as well prepared as possible, as client care is paramount to all we do. Clearly, all those in the housing sector need to be on guard.”

Paul Philip, the Solicitors Regulation Authority chief executive, said: “Law firm client accounts are being targeted and solicitors and their clients are suffering disruption and potential loss. It is essential that firms understand the risks and take precautions to avoid falling victim to these attacks. This is an issue that is not going away.

“ This is obvious not just from the reports we are receiving direct from law firms and members of the public, but also in our discussions with local law societies.”

The SRA has warned about the threat of cybercrime since it was first highlighted last year. The risk has not eased, however, and criminals are using increasingly sophisticated methods to obtain money or sensitive information fraudulently, the SRA said.