PROPERTY SCAMS – BEWARE (CYBER) WOLVES IN SHEEP’S CLOTHING!

As children, many of us would have read a fable called “The Boy who cried Wolf” about a shepherd boy who repeatedly called out to the villagers that a wolf was devouring their flock of sheep when in fact it was untrue. Of course, many of us know how the story panned out. This story demonstrated that lying never ends up in a happy ending, or at least that’s what our parents tried to tell us. Foreseeably though, the writer’s intention was perhaps a little more than this. Something that he knew modern society would desperately need to be aware of: Appearances are deceptive.

Thanks to accelerated technological advancement, cybercrime levels are surging at an alarming rate. Cyber criminals of course revel in the ability to dupe suspecting individuals with their techno savvy and have no reservations about doing so unashamedly. As one would imagine, it didn’t take these online dark agents long to figure out that when you buy and sell property you become a prime target because of two main reasons.

First, and perhaps most obviously, property transactions provide attractive plunder for the would-be scammer. Secondly, electronic communication between attorneys and clients is easy picking to these individuals and creates a chilling opportunity for interception.

Consider this scenario (which is not as far-fetched as you would think):

You’ve sold your property for R5m, transfer to the buyer has been registered but the money doesn’t show up in your bank account (let’s call it “account A”). You phone your conveyancer only to be told “but we did pay you, we followed your instruction to pay into account B.” Of course account B was set up by a scamster and your R5m is long gone. Unfortunately, before you can act, it may be too late. What happened?

Cyber criminals are highly skilled and resourceful. It would be impossible for a non-tech savvy individual to comprehend the vastness of their abilities. The two main areas of risk currently appear to be the following areas:

  1. Your attorney’s payments to you: As a seller, when you give the transfer instruction to your attorney you will nominate a bank account – account A in this example – to receive the sale proceeds. Before transfer however (often at the very last minute) the firm receives a genuine-looking email “from you” changing your banking details to “my new account, account B”. Your emails to and from your attorney have been intercepted, and your details have been clearly changed.
  2. Your payments to the attorney: The main risk here is to the buyer paying the whole or a large portion of the purchase price to the transferring attorney. Of course transfer duty and other costs of transfer can also add up to a tidy sum, whilst as a seller you will be paying for things like bond cancellation costs, rates, agent’s commission and so on. The scam here is that once again emails are intercepted, and this time you receive an authentic-looking but entirely fraudulent email asking you to pay into “account C”. The email appears to come from the conveyancing firm but of course it is again a clever (often very sophisticated) spoof, this time of the firm’s branding, details and email address.

The false account details might be in the email itself or in a falsified attachment – nothing is safe. The email may be in the form of a “we’ve changed our banking details” notification, or the criminal may work on the basis that you just won’t notice the change. And of course account C isn’t the conveyancer’s trust account at all.

The big question then becomes “How can I protect myself?”. The problem normally starts with criminal interception of emails or hacking of online data and what follows is a classic case of a “wolf in sheep’s clothing” deception. There are various resources that can be accessed to assist in avoiding these sort of scenarios and listed below are a few of the important ones:

  • Keep all your anti-virus, anti-malware and other security software updated, learn all about protecting yourself from malware/spyware/phishing attacks (your bank will have tips for you on their website or through a dedicated consultancy team)
  • Treat all electronic communications with caution – even those appearing to come from a trusted source like your attorney.
  • Make all attempts to maintain contact with your attorney and ensure that your instructions are clearly put forward at the outset of the transaction.
  • Be suspicious if anything in the email just feels “not-quite-right” – perhaps only a cell phone number is given, or a free generic email address is used, or the wording is somehow “off”. Red flags should go off for e-mails from Gmail accounts which are easily set up and accessible to any person with an electric device with internet access as it is unlikely that your attorney would use such generic form of mail. If the email makes you even the slightest bit uneasy, err on the side of caution and investigate further.
  • Most importantly, never accept notification of any change in your attorney’s banking details without visiting or phoning your attorney to check all is in order (don’t of course use the phone number given in the suspicious email though!).

The end goal: be vigilant, be prepared and always remember that “Appearances are Deceptive”. For any further questions you may have on how to protect your property transactions, contact Randles Attorneys for assistance.

By: Shian Heynes – Attorney

 

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