Are you sure? Conveyancing and cyberattacks

Issues such as cyber attacks and money laundering are high on the risk list for all firms, but particularly for conveyancers, where large amounts of money are at stake.

Fraudsters have never been so sophisticated, perpetrating such realistic scams that there have been cases where prospective homeowners have been conned out of hundreds of thousands of pounds.

As a regulator, we demand the highest standards from our regulated practices and work with them to ensure they comply, with regular monitoring and inspection work throughout the year.

It is this close contact that has enabled us to identify the biggest issues facing firms which we have put together, along with practical advice on how to resolve them, in our second annual Risk Agenda.

Below are five of the key areas to be aware of in 2022. 

IT resilience and recovery

One incident, in particular, last year, which paralysed the systems of one of the country’s largest conveyancers, sent shockwaves across the entire legal sector.

It should – a recent government study found almost 40 per cent of businesses had reported a cyber incident in the last 12 months, with the true figure including unreported attacks feared to be much higher.  

Experts warn that it is not just the attack itself, but the recovery from it that has the potential to cause significant disruption – and all businesses are being urged to review and strengthen their cyber security, particularly in light of Russia’s invasion of Ukraine.

Your IT department or provider should be continually monitoring the data protection options and counter-measures available, stress testing systems and training staff.

Ignorance is not an option either – earlier this year, the Information Commissioner’s Office fined a large solicitors’ firm £98,000 for known system vulnerabilities that led to a ransomware attack.

Anti-money laundering (AML)

The situation in Ukraine has put an even greater focus on anti-money laundering (AML), with the government estimating it likely that thousands of UK properties have been bought with illicit funds.

Just this month, new legislation took effect requiring anonymous foreign companies seeking to buy UK property to declare their true owners on a ‘Register of Overseas Entities’ in a bid to root out oligarchs and corrupt elites.   

Common areas of non-compliance include failure to update AML policies or keep staff training records up to date.

You should be familiar with your duties as laid out in the Anti-Money Laundering (AML), the  Combatting Terrorist Financing Code and the Money Laundering Regulations 2017.

Firms must also ensure they are familiar with the government sanctions regime and sanctions list, which is regularly updated. Failure to adhere to the rules could result in prosecution or a large fine.

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