Beware of property cyber scammers

Cybercrime is on the rise. SA is reportedly now the second most targeted country while the Legal Practitioners Indemnity Insurance Fund reported over 110 cybercrime related claims worth R70m for the July 2016 to August 2018 period.

Scammers are ever more sophisticated as they lull their victims into complacency. Property transactions are a favourite because of the large amounts of money and electronic communication which is fertile ground for interception and deception. Cyber criminals strike in two main scenarios:

Scenario 1 - attorney's payments to you - the seller notifies the transferring attorneys of the bank account details for the sale proceeds, but before transfer however (often last minute) the conveyancers receive a genuine-looking email from the seller changing the banking details. Your emails to and from your attorney have been intercepted, and your details cleverly spoofed.

Scenario 2 - payments to the attorney - the risk to the buyer lies in payment of the whole or part of the purchase price to the transferring attorney but could also extend to the transfer duty and other costs. The risk to the seller could be payment of bond cancellation, rates, agent's commission and other costs. The scam involves intercepted emails and you receive an authentic-looking but entirely fraudulent email purporting to be from the conveyancing firm asking you to pay into a particular bank account. The email is likely to have the firm's branding, details and email address.

Can you claim from the attorney? By the time you realise you have been duped, the criminals and money are long gone. A recent High Court judgment dealt with a "scenario 1" case and the transferring attorney was ordered to pay damages of almost R1m. The Court reached this conclusion on the particular facts and found negligence, but this might be difficult to prove, and litigation is expensive and risky. Even if you succeed with a damages' claim, the attorney's normal indemnity insurance excludes these types of claims so your victory could be a hollow one.

Vigilance at all times is vital. Ensure your anti-virus, anti-malware and other security software is always up to date. Learn about protecting yourself from malware/spyware/phishing attacks, and generally treat all electronic communications with caution, even those appearing to come from a trusted source like your attorney.

Be suspicious if anything seems out of the ordinary - perhaps only a cell phone number is given, or a free generic email address (like Gmail) is used, or the wording is somehow "off". 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 supposed 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 contact details given in the suspicious email, they could also have been doctored!). 

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Source: Du Ploy Inc.