Ever increasing fraud levels and increasingly sophisticated methods of fraud are, it seems, an ever-present threat now for the property transaction and sadly this isn’t a new problem. Back in 2008 research by American Express identified ID theft as the biggest security concern for 43% of individuals in the survey – higher even than street crime. If the poll was re-run today that 43% figure would probably be higher.
Conveyancers will be all too familiar with the increasing levels of fraud and the almost exponential growth in the number of warnings the SRA have issued over the last few years in relation to bogus law firms. In turn, the last few SRA Risk Reviews have had fraud as the central theme.
Probably in response to the latest SRA Risk Review where the three primary risks were fraud related (bogus law firms, money laundering and cybercrime), the Law Society on 21st August 2015 published a practice note aimed at helping law firms recover if they fall victim to a client account scam.
On the back of the new practice note, in September, TM Group asked conveyancers: “Has the latest Law Society Practice Note led to any changes at your practice?”
The results were surprising with at least a third of conveyancers stating that they hadn’t even heard of the practice note (see chart below).
Of the 36% of conveyancers that told us that their firms had taken heed of the Practice Note, the changes that they had implemented in response included the checking of bank details using Lawyer Checker, as well as undertaking ID and anti-money laundering checks.
Clearly some law firms will already be making concerted efforts to remain vigilant to the threat of fraud & scams but, equally, there will be some firms within the 64% of conveyancers who told us that they hadn’t implemented any changes in response to the Practice Note that simply don’t consider fraud a serious threat.
For those firms, it is important to reiterate just how disruptive and potentially damaging being the victim of a scam would be. It is clear that prevention and protection, despite the extra costs and time that comes with it, is an awful lot better than dealing with the aftermath of a scam. Obvious I’m sure but sometimes the easy things are overlooked.
For the 33% whose awareness of the Practice Note came from our survey, it is clear that some of the respondents would not be expected to know about it.
But, for the majority of these respondents – and I suspect the Law Society – it is a question of why this and maybe other Practice Notes get missed?
The Law Society already offers journalists the ability to sign up for press releases and for newsletters, so perhaps they might consider a similar services for COLPs for Practice Notes?
In the battle to remain vigilant of fraud, there are always simple and cost-effective solutions available to assist law firms in helping to protect themselves, including:
But, with property fraud on the increase and the prize of being successful so large, it does seem that sadly law firms are going to have to introduce new services to do their best to protect themselves and so avoid ever having to enact the requirements of this Practice Note.