Protection of client money is paramount. Highlighted as a priority risk in the SRA’s Risk Outlook, protecting funds that a client entrusts to your firm is vital if you are to maintain a professional standard. Not to mention, the consequences of not doing so can be severe.
Whilst the awareness of risk is growing, so are the cases of firms being targeted. Adoption of a preventative tool such as Lawyer Checker is vital to ensure that the risk is mitigated effectively and client funds are protected.
Assessing the risk
It’s no coincidence that the SRA frequently draws attention to this risk; as highlighted by Chief Executive, Paul Philip, it’s an issue which requires “constant attention”. For firms, this won’t come as a surprise, with protecting client money commonly ranking top of the priority list. However, it’s vital that this notion is reflected in the firm’s prevention strategy.
Whilst they may believe that their current control method is effective, this may only be because they have not yet been targeted.
A weak prevention system is one of the few vulnerabilities which can cause a firm to fall into disrepair – is it really worth the risk?
Thanks to the rapid development of technology, client funds are now exposed to a new risk which is rarely out of the headlines.
Whilst it may be one of the most recent, theft from a third party is one of the most prominent threats to law firms, with property transactions being a common target.
Through impersonating an involved party, the fraudster will intercept email correspondence and request that money is sent to new bank details at their request, ensuring that the thousands of pounds of client funds never reach the intended destination.
The first quarter of 2017 saw a record number of cybercrimes targeting client funds, with over £12 million being stolen by cyber criminals since the start of 2016. Despite the growing alertness to the risk, these figures indicate that it’s one which is unlikely to go away.
Criminals are becoming increasingly sophisticated when targeting firms, often taking on the identity of another firm in order to fool the one they’re trying to take advantage of. Although you might question transacting with an unfamiliar firm, you’re far less likely to query an email from a firm that you deal with regularly…but you should.
As stated in the SRA’s Risk Outlook, it’s essential that firms ‘confirm the identity of other firms that they deal with,’ regardless of how small the risk may seem.
It’s essential that an effective strategy is adopted on a wide-scale basis in order to ensure every transaction is protected to the same high standard.
To mitigate the risk of fraud and verify that the bank details of a third-party are genuine, the SRA advises considering the use of a service such as Lawyer Checker.
Staff are the first line of defence
Adopting a consistent strategy is vital if firms are to encourage a positive culture, both reducing uncertainty and ensuring that employees are highly alert to the risk.
Providing firms with market leading risk management solutions, Lawyer Checker can be utilised as part of an effective prevention strategy.
By using Lawyer Checker’s comprehensive system, professionals are able to gather further information on the firm that they’re sending money to or client that they’re dealing with. A proactive tool for firms, this enables them to better assess the risks associated with a transaction and help them to better protect client funds.
In order to check the details of firms, blanket use of Account & Entity Screen can provide firms with an effective risk-management strategy and act as a consistent level of prevention.
With recent cases revealing that Find a Solicitor may not always be accurate enough, firms need assurance that their chosen strategy will work effectively each time it is used.
An Account & Entity Screen search will provide firms with an immediate email response following a comprehensive check against the Lawyer Checker database.
Where an infrequent or unknown result is given, in-depth manual research will be carried out by the Lawyer Checker team, enabling firms to better assess the risk.
Firms can also benefit from Lawyer Checker’s Consumer Bank Account Checker in order to check the account details of clients.
As well as enabling firms to check the personal account details of a client that funds are being sent to, Consumer Bank Account Checker can also be used to validate the source of funds received.
Powered by data from leading international company Experian, a Consumer Bank Account Checker search will report on whether the account exists, as well as providing comprehensive details on whether the account matches the purported individual.
In addition to enhancing a firm’s existing safeguards, consistent use of Consumer Bank Account Checker also compliments anti-money laundering procedures by providing evidence that the client matches the account that funds have been sent to or received from.
Where a supposed client is requesting that their account details are to be changed, Consumer Bank Account Checker enables a firm to quickly assess the risk and highlight whether the legitimacy of the request should be questioned.
As well as being a risk management strategy which is easy to implement across a firm, using Lawyer Checker saves professionals time – something which is often in short supply.
By adopting services such as Account & Entity Screen and Consumer Bank Account Checker, firms can ensure that they are protecting client money to the highest standard, with staff confident that they can verify details of the firm or individual on the other side of the transaction.
If you don’t check, how can you ensure that your client’s money is protected?