19 August 2016 by

Protecting against fraud and cyber-crime when buying and selling property

Solicitors are increasingly being targeted by fraudsters trying to obtain client money through various scams.  In particular, fraudsters are targeting those law firms who deal with conveyancing due to the large sums of money regularly being transferred between firms and their clients.

A recent Law Society study showed that 1 in 5 law firms have been targeted at sometime by scammers.  The legal profession is focusing on trying to tackle the ever more sophisticated schemes being designed to defraud both conveyancers and their clients.  Such fraudulent schemes range from cyber-fraud, involving emails being intercepted and altered to give false bank account information, to identity fraud.

In the recent High Court case of Purrunsing v A’Court & Co (a firm) & another, a fraudster posed as the registered owner of an empty un-mortgaged property in south London.  The fraudster managed to sell the property for £470,000.  Although there was no allegation of dishonesty on the part of either firm of solicitors, nevertheless both firms were held jointly liable for the financial loss suffered by the buyer.  The judge found that the fraudulent seller’s solicitor made “no serious attempt” to carry out proper due diligence or comply with the strict anti-money laundering regulations designed to prevent such fraud.  The buyer’s firm failed to obtain any documentation linking the seller to the property.

All firms of solicitors are regulated by legislation and governed by the Solicitors Regulation Authority (SRA) which imposes strict rules on law firms and their employees.  The SRA implemented a review of the checks used by solicitors to guard against money laundering and terrorist financing in 2014, and found that a significant number of law firms were not doing enough to comply with the rules.  As a result, the SRA have required that all solicitors improve their policies and procedures to reduce the risk of being targeted by fraudsters.

As a Lexcel and Conveyancing Quality Scheme accredited firm, the quality marks awarded by the Law Society to firms who meet the highest standards of expertise and service, Bolt Burdon’s residential conveyancing team prides itself in having a reputation for being thorough in our anti-money laundering checks and procedures to guard against potential scams.  When dealing with our clients, we will always verify their identity and the source of any funds for a transaction. We also carry out financial checks against the solicitors acting on the other side of the transaction to ensure that they are a genuine firm in order to protect all our clients.  Every possible step is taken to ensure that we are ahead of any scam or potential fraud.

It may sometimes seem onerous for clients to have to provide all the various forms of identification and evidence of ownership that we ask for.  However, we try and make the whole process as pain free as possible for our clients with the aim of not only protecting you but your hard earned money as well.

You can also contact one of our other solicitors in the Residential Property team here.

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