Insight: The rise of fake firms and the impact they have

In this short blog series, Lawyer Checker’s Jennifer Williams outlines how these fraudsters are impersonating law firms stealing vast amounts of money, what it means for conveyancers and what is being done to combat this type of crime.

Fake firms - the rise of fake firms

Criminals who wish to steal people’s money via conveyancing fraud create their own bogus firm to communicate with the other party’s solicitor in order to extract the funds.

They go about this by impersonating law firms that have ceased trading or chosen a name that is almost identical to that of a genuine company. These fraudsters go the whole hog and set up bogus websites (including some accreditation marks) which look the part and email address with minor spelling differences all with the aim to avoid detection.

The Solicitors Regulation Authority (SRA) receive messages from the public and professionals highlighting potential bogus firms to their attention. They then send out scam alerts, highlighting the fact that fraudsters are impersonating a firm/employee. It is then the responsibility of employees who are in correspondence with firms to ensure they have the correct details and not that of the fraudsters.

One of the recent alerts issued highlighted that a fraudster had impersonated a solicitor, setting up an email in her name, but added an extra letter into the email address with the sole purpose of intercepting emails and ultimately misappropriating funds.

Between 1st January and 31st March 2019 the SRA distributed 73 scam alerts. 17 of these alerts were for bogus websites and 29 alerts regarded email/phishing/malware scams.

These alerts show fraudsters aren’t slowing down, they’re capitalising on the increased appeal of conveyancing fraud due to the amount of money involved and the stress regarding a transaction. Law firms need to be aware of how easy it can be to clone a firm and know how to spot the phoneys from the real deal.

Double checking email recipients or contacting the firm in question to clarify information may seem like over kill; however, a little bit of due diligence could go a long way in ensuring the client’s cash isn't lost.

In our next blog we will look at what the rise of fake firms means for conveyancing. 

Conveyancing is the highest risk area of law for fraud due to property being attractive to criminals, not just because of the significant funds involved in the transactions, but they also present opportunities to clean large amounts of money quickly.

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Since becoming Head of IT with Lawyer Checker and the Practical Vision Network, Jen has immersed herself in finding practical cyber security solutions to help protect the legal sector. Committed to safeguarding law firms from cyber attacks, Jen has developed and enhanced her extensive experience by becoming an accredited and certified ISO 27001 lead auditor, and Cyber Essentials Assessor.