The fraudsters after conveyancers' money

Historically, fraudsters tended to target specific properties, but this required a significant amount of legwork, including the setting up of a bogus law firm complete with website to handle the 'sale'. Although firms should still beware bogus firms, most frauds now fall under the cyberattack banner, of which the three most common are phishing attacks (by email), vishing attacks (by telephone), and man-in-the-middle (MITMA) attacks.

Most phishing attacks are quite easy to spot, with numerous examples on the ActionFraud and Solicitors Regulation Authority (SRA) websites, although fake emails purportedly from the SRA, Law Society, or Land Registry cause most concern. Phishing emails don't pose the biggest risk to firms, but it is important to remind everyone of the risks as the links in such emails usually contain malware that can lie dormant on a firm's systems for weeks or months.

A greater menace comes from MITMA, where fraudsters intercept and doctor emails, usually by changing bank account details, before sending them on to the intended recipient. As they adopt the language of the original email, they can look genuine. Fraudsters find it easy to mount such attacks due to the widespread use of public wifi networks, which are much less secure than your wifi network at home or at work. Having gained access, they can sit back and wait until an email supplies a completion statement to ask for funds to be transferred. When funds are diverted as a result, it is often difficult to pin down whether blame lies with the solicitor or the client.

Vishing attacks generate
fear and panic and can be
very convincing. Although
not directly cyber related, they
tend to be bracketed with other cyber risks, and the chances
are that the fraudsters will have enabled themselves to target your firm as a result of malware or the trawling of social networking sites for personal information.

If there is any question that money has been improperly withdrawn from client account, expect the SRA to be vigilant.
In one case, the insurer decided that the solicitor was tainted with dishonesty for making eight round sum transfers from client account even though the police had no such suspicions. The SRA intervened in the firm and the sole practitioner was subsequently made bankrupt.

Some media reports suggest that there are two successful property-related frauds every week, producing £1m per month for fraudsters. Apart from the misery caused by cyberattacks, firms need to remember that an email is the digital equivalent of a postcard and that, in most such frauds, the human element is probably the weakest link in
your defences.

Tim Prior is director of PNCR Legal @TimPriorPNCR www.pncr.co.uk

Tim Prior will address how to overcome cybercrime in the residential property stream at Solicitors Journal Live 2016. For more details visit bit.ly/SJLIVE2016