Two property buyers scammed by fake law firms in past month: Law Society of Singapore
SINGAPORE — A client was asked to transfer money by a “law firm” in a property deal through telegraphic transfer to a bank in Hong Kong.
He did so despite a previous instruction by the law firm that he has engaged to make the payment through a cashier’s order.
Unbeknownst to the client, he transferred the funds to an account that belonged to a scammer.
It was discovered later that the law firm had not requested for a change in payment method and that the client’s email account had been hacked.
The details of the scam were revealed during a media briefing held by the Law Society of Singapore (LawSoc) on Friday (24 May).
The scammer had impersonated a lawyer in early May after hacking into the client’s email account.
The fraudster had bought a domain name that was very similar to the name of the lawyer’s firm, changing the full-stop to a hyphen and even copying the name of the firm’s secretary in the fake emails. The scammer sent the client emails about the change in payment method - specifically a telegraphic transfer to a Bank of China account in Hong Kong - even though the client’s lawyer had informed him to make a cashier’s order.
The specific details of the scams, including the law firm and amount involved, were not revealed due to confidentiality issues.
About two weeks earlier, another client was deceived into transferring some $300,000 to another scammer impersonating her lawyer but fortunately for her, the ruse was thwarted.
The client in this case, also a property buyer, was seeking to pay 25 per cent of the purchase price in a deal. She had engaged a lawyer who emailed a copy of a letter requesting for payment and sent a physical copy of the original letter to her.
While the client received the original letter by post, she failed to receive the email as the fraudster had hacked and taken control over her email account.
The scammer began intercepting the client’s emails and posed as the lawyer in email exchanges with the client. The ruse involved the use of a bogus email address, which was very similar to the law firm’s name and email domain.
The client was misled into believing that the developers involved in her deal would not accept payment by cheque and the scammer requested payment by telegraphic transfer.
This spurred the client to ask her lawyer about the change in payment method. The lawyer denied sending emails regarding telegraphic transfers.
However, feeling pressured by the scammer’s emails, the woman proceeded with the telegraphic transfer and sent her lawyer proof of the transfer through WhatsApp and email.
The lawyer noticed the wrong bank account in the documents provided and called the client to immediately stop the payment. The client was able to do so and no financial loss was incurred.
“Because it happened within a close proximity in time, a matter of weeks, we are alarmed. We are concerned that they may be other examples that may take place in the future,” said LawSoc President Gregory Vijayendran. The law firms involved had informed the LawSoc of the incidents, Vijayendran added.
“Speed was of the essence, we don’t want anyone else to be duped in the meanwhile,” said LawSoc Vice President M Rajaram during the briefing.
While the law firm and client in the first case made police reports, the parties involved in the second case did not do so.
When asked if there were other cases, Vijayendran said the LawSoc was not aware of any and whether the two scams uncovered were related.
“We are also very concerned for innocent inexperienced buyers, those who are doing a transaction for the first time,” said Vijayendran.
Explaining the typical payment methods in conveyancing deals, Vijayendran said that buyers usually pay a deposit balance of five per cent or 10 per cent by cheque or cashier’s order in favour of the seller’s law firm, specifically the latter’s conveyancing account.
The sum would not likely be paid to any other party, let alone the buyer’s own law firm, said Vijayendran.
The balance of the sale proceeds would be paid by a cashier’s order to the vendor, and to the mortgagee bank of the vendor. Stamp duties would be typically paid to the buyer’s law firm or directly in favour of the commissioner of stamp duties.
“This is the norm... any variation from that should therefore be treated with caution,” Vijayendran advised.
Advice to lawyers
In an effort to curb such scams, the LawSoc advised lawyers to:
advise clients who receive email requests regarding fund transfers to verify with the law firm before effecting any payments.
clearly communicate payment instructions to clients who are not IT savvy.
explain conveyancing processes and timelines clearly, preferably in writing, to foreign clients and permanent residents who are unfamiliar with such matters.
advise clients to re-confirm with law firms before taking action, especially if clients receive instructions that deviate from previous communications.
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