In recent years conveyancers have embraced anti-money laundering checks, client identity and source of fund verification because of sophisticated crime. Rightly or wrongly it isn’t just about the title any longer, the role of the conveyancer is widening.
On the 13th May the SRA issued a “Scam Alert” warning you to be aware of identity theft of law firms suggesting you should be careful when dealing with the other side. It recommends you check:
- there is no mismatch between the firm’s and individuals’ address and telephone and website details (e.g. a solicitor’s name from a different law firm),
- the contact details for the firm are not incorrect, relate to a different law firm or are fictitious (e.g. a building number that doesn’t exist on the street quoted, or the street name doesn’t match the post code quoted),
- that a firm isn’t purportedly using a mobile number with no landlines, and
- registration at Companies House.
This “Scam Alert” follows a substantial increase in the number of firms that have had their identity stolen or cloned by criminals. In 2012 the SRA issued 22 warnings about fraudsters cloning or inventing solicitors’ practices. This year there have already been 30 warnings. Often the criminals use the same name and very similar addresses to those of real firms purposefully.
These issues all follow a March 2012 warning notice issued by the SRA entitled “Bogus Law Firms and Identity Theft” which starts with the chilling words;
“There are serious and continuing risks to the public arising from the activities of criminals and criminal gangs who are setting up bogus law firms or bogus branch offices of genuine law firms with the intention, usually, of stealing mortgage loans.”,
It goes on to state;
“You should check the Find a solicitor website since there are sometimes bogus law firms which have not sought registration with the SRA and will not appear there; but bear in mind also that the nature of identity theft is that fraudsters may have obtained some form of registration by fraudulent misstatement to the SRA and therefore an entry on Find a solicitor should not be taken as verification that the firm is genuine.”
With criminals using real firms names and so many firms using trading styles and having complex structures it is often very hard to verify that the firm you think you are dealing with is the firm on the Find a Solicitor list.
It is not a surprise that the recent Conveyancing Thematic Study by the SRA has found that three quarters of firms said that it would be useful to have more training on property-related fraud and money laundering.
Steve Wilmott, the SRA’s Director of Intelligence and Investigations has offered reassurance stating in the 13th May ”Scam Alert”;
“We will take action against anyone holding themselves out as a solicitor which is a criminal offence.
“The offenders however are extremely clever and we are urging both clients of legal services and solicitors’ firms to be on their guard. Quite often firms themselves are not aware that their information is being used to deceive.”
Lawyer Checker’s Managing Director, Chris Harris says:
“The SRA are spot on this is a very serious issue. In the last year we have seen two firms purporting to be regulated by either the SRA or the CLC when they are not but using very similar names to real firms. We have seen conveyancing purportedly being conducted from firms and in particular branch offices that have recently been closed and we have seen retired solicitors without insurance offering undertakings and holding themselves out as properly regulated and insured when they are not.”
“Whilst we help hundreds of firms to counter this risk many firms just do not believe that it is happening and have very few measures in place to check where they are sending their clients’ money. Given the warning not to rely on the Find a Solicitor service and the multiple warnings from the SRA about this issue, if your firm was conned into sending money to criminals would you be able to justify and evidence the checks you made?”
“You may think you are dealing with a brand and firm that you know but given the level of sophistication of criminals it is easy to be duped. We recommend that you store and check against the account numbers of the firms that you trade with regularly to ensure you know that the account relates to a real firm but where you have no track record of sending money to a particular account you should use a commercially available account number checking service like Lawyer Checker to ensure that the account relates to a real conveyancing practice.”