It goes without saying that brokers are unhappy about recent fraud cases that have led to transactions breaking down – often with financially disastrous consequences for their clients or the seller.
While fraudsters are obviously the root cause, you are asking for trouble if your systems or staff are easily breached or hoodwinked. Although most mortgage brokers are pretty up to speed on fraud, the sad reality is that some conveyancers are lagging behind. However, brokers and their clients will be relieved to learn that conveyancers are getting their act together – reducing their exposure to fraud.
According to the 2015 edition of our Conveyancing Market Tracker, exits and mergers meant the number of firms were down by 514 from 2014. Even then, more than five thousand firms held Land Registry client accounts towards the end of 2015. The risk of a small number of rogue operators is real and conveyancers are on the frontline. Maintaining a good reputation means conveyancers need to protect themselves against such threats, and increasingly firms are re-evaluating their systems and processes to reduce the risks.
While cyber criminals have devised ingenious methods to intercept emails and change bank details, the truth is most of these unfortunate cases occur due to human error on part of the customer or the solicitor. For example, a borrower calling up a law firm after receiving a suspicious email or cross-verifying bank details doesn’t require a sophisticated system in place. All it needs is an understanding on the part of the customer and the solicitor on how cybercrime works.
In light of that, the Conveyancing Association has just developed a clever, but incredibly simple tactic to help conveyancers. Through its Cyber Safe Scheme, a conveyancer must provide the customer with a letter, containing the law firm’s bank account details, and information on identifying fraud. With this hardcopy in hand, a customer can scrutinise any emails purportedly sent over by the solicitor and flag up anomalies. As I write this, such an email has pitched up in my inbox. A quick check shows it’s clearly fraudulent: someone masquerading as a law firm asking for confirmation of transaction details.
Property technology experts are already ahead of the curve in curbing risks for all parties. Tools like Lawyer Checker can provide a record of whether a solicitor’s bank account has been used on a conveyancing transaction in the past, so as to alert the enquirer in the event of a suspicious account showing up. Conveyancing Panels are also working harder to vet law firms.
It’s a few years away before we have a completely safe and automated process for a transfer of Title. But technology in conveyancing is rapidly improving as solicitors shun legacy systems and old suppliers. Brokers should rest assured conveyancers have the same interests as them. It can be quite a tussle sometimes, but it’s important to remember we’re all in this together!
Mark Riddick is chairman of Search Acumen