Every good conveyancer should be aware of the risk of vendor conveyancer fraud. Not only has the media featured many alarming cases, but the Solicitors Regulation Authority in March last year released a warning notice about bogus firms and identity theft, stating that you cannot rely on the SRA database of solicitors to confirm that a firm is legitimate.
There are two aspects for firms to consider in relation to this type of fraud. The first is how to avoid sending money to criminals pretending to be legitimate firms, and the second is how to prevent your brand from being hijacked by criminals for the purpose of duping other conveyancers. There are commercially available solutions to address the first of these aspects, so I will concentrate on the second.
Vendor conveyancer fraud can occur in many ways, including:For a criminal, hijacking a firm like yours is ideal because you represent a respected and legitimate conveyancing brand, and it will be easier for the criminal to convince others that they are ‘safe’ to send money to ‘you’. The impact on you could, however, be significant. If your firm is cloned, copied or infiltrated, you may be accused of being involved, which may result in lenders removing you from their panels while they investigate, and brand damage.
- creating a fake practice (Orient Solicitors, not a genuine firm, in 2010);
- creating a fake branch of a business (Rothschild) in Davisons Solicitors v Nationwide Building Society [2012] EWCA Civ 1626);
- cloning a legitimate firm (Acorn Solicitors in 2010);
- solicitors or paralegals infiltrating firms on behalf of organised crime (although few firms are prepared to admit this); or
- a firm being sold or an arrangement being reached with incoming partners, often as partners retire, which is not above board.
How can you protect yourselves from being used as the brand through which the purchasers’ conveyancer is conned?All of these points help to ensure that you have the most important weapon a law firm can have against fraud: a culture of vigilance. Frauds committed internally or externally cost the industry dearly, undermine the solicitor brand, and damage solicitor relationships with lenders and insurers.
- Check your website regularly for bogus information added by criminals, and make sure it has all the appropriate regulatory information on it necessary for another firm to confirm your legitimacy.
- Acquire domain names similar to your own. On 21 December 2012, the SRA issued a warning that www.aplinslaw-uk.com (bogus) is not the same firm as www.aplins.co.uk (legitimate). Both sites remained live well into the new year, and the two look nearly identical.
- Check the SRA website, LinkedIn, Facebook and lenders’ information at regular scheduled intervals. We know from Davisons that the SRA can be duped into listing a fake branch office, and we know criminals are sophisticated. They will try to create a facade of legitimacy across the web, and may try to con lenders into creating fake branch offices for your firm. Set up Google alerts. This is simple and you will then receive an email every time Google finds something on the internet that refers to your brand. It is not foolproof, but it is an easy way of finding web pages relating to your brand. It is also, incidentally, a good way to look out for good and bad online customer reviews of your firm.
- Claim your Google Places for Business, so your business location will show up on a map search in Google. If you do not take this step, criminals could claim your location, creating legitimacy for what they are doing.
- Make your compliance officer for legal practice available to third-party solicitors.
- Don’t let staff work from phones or email accounts which are not your own. For more information, see the SRA bogus firms warning notice.
- Train your receptionists to be cautious and to raise alarms when clients ask for branch offices or staff that you do not have.
- Complete full career checks before taking on staff.
- Lock down your requisitions in your case management system, so staff cannot alter the client account number to which purchase funds are sent.
Chris Harris is a solicitor and consultant. He created the Today’s Conveyancer website (todaysconveyancer.co.uk) and the anti-fraud service Lawyer Checker (lawyerchecker.co.uk)
- This article first appeared in Property in Practice, the quarterly magazine of the Law Society’s Property Section. See the website for more details.
No comments yet