Letting agents are being warned that fraudsters could be finding a new target – tenants’ deposit payments.
In the first cases we have heard about, two sets of tenants using the same agent were conned into paying their deposit into a bogus account.
Branch manager Kevin O’Grady of Alwyne Estates in Islington, north London, warned other letting agents about the dangers.
He has also hit back against claims in a local newspaper article that his firm should reimburse one couple, who paid £1,385 into the fake account.
The story, published by the Islington Gazette, reported how Jessica Redman and her partner, who had found a rental home through the agent just before the Christmas break, had received an email purporting to be from the member of staff at Alwyne Estates dealing with the rental.
But, although the email address was slightly different, the couple made the payment using the account details set out in the email without checking first.
O’Grady said the firm would not reimburse the money to the couple, as he did not believe it was its responsibility.
He said: “We were very sorry to learn of what happened when we returned to the office on January 2. But the couple sent numerous emails – almost blackmailing us to pay compensation for what had happened. They said they would go to the press and, of course, we could not stop them.”
O’Grady maintains that the couple should seek compensation through their bank under a voluntary code introduced in May last year, which 17 major banking brands have signed up to.
It reimburses clear ‘no blame’ customers who have been scammed by fraudsters almost immediately.
O’Grady said: “We had one other rental customer who fell victim to this scam email and they have been fully reimbursed by their bank.”
He added: “When we learned what had happened, we informed the police and the Information Commissioner’s Office (OCO) immediately, contacted all our tenants and landlords and closed down the email address.
“We also introduced new training for staff and a two-stage authentication process for logging on to systems.”
But O’Grady said this should be a ‘wake up’ call to all agents. “We supported this couple in every way we could; sat them down talked to them and tried to find them another property. But they were determined that we owed them compensation.”
A number of fraudsters have operated a larger and better known fraud – targeting home buyers’ funds by hacking into estate agents’ and conveyancers’ emails to trace a transaction.
The modus operandi in the Alwyne Estates case seems similar, in that email addresses that look authentic but are very slightly different are used by the fraudsters, directing customers to pay their money into what they think is a legitimate account – but isn’t.
The British Bankers Association said it could not comment on specific cases but referred agents, tenants and buyers alike to its Take Five to Stop Fraud campaign.
It includes tips such as confirming account details on the phone before transferring any money and making a small payment first to check that it has gone into the right account.
Heartbreak for first-time buyers as their money vanishes into fraud bank account
NEVER EVER send or rely on bank details in an email EVER. Then you are safe.
Alarmingly:
1. conveyancers still send their bank details by email (in their replies to requisitons or by adding them in their contracts)
2. estate agents send their commission accounts by email (with bank details)
3. mortgage companies send their repayment statements (with their bank details) by email
Conveyancers: create a quick A5 flyer and send it out on all transactions stating in bold
‘NEVER use bank details sent by email – they are almost certainly a cyber criminal’s account.’
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Not sure if I follow this one. Sending bank details from a company isn’t the problem, its the recipient being duped into thinking the account is genuine and there lies the problem with BACS. What is required is an authentication system by the banks to confirm the account is genuine before money is transferred.
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less than 5% of our policy holders take out cyber liability. Most purchases are reactive. Be sure to include social engineering cover if you wish to include the scenario mentioned in this article.
CYBER LIABILITY is regarded as the largest threat faced by businesses. No business is immune from being hacked. Since the implementation of GDPR, there has been a pronounced increase in cyber related claims frequency and especially in SME’s, who hackers regard as being more vulnerable and therefore easier to penetrate.
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I email our Tenants with bank details to pay the rent and deposit into when I email out the legal paperwork, but I also put on there for them to call me (but not listing the number in the email) before they make the payment so that I can confirm the bank details to them.
I have lost count of the times I have tried to give the account details over the phone to be asked if I can email it to them.
The bank details are also listed in the PDF version of the tenancy agreement I send them to read through, but I am never convinced Tenants actually read it before they sign it so I don’t know how many would see them!
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This sounds a bit rum.
Was the agents’ email account hacked or the prospective tenant? There’s a lot of information there that would only be known by someone who had a lot of inside knowledge.
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I thought that too. Where did the fraudsters get the tenants email addresses from to send the fake bank details to?
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