Statistics on crime indicated 6.8m reported incidents of fraud in the UK over the past twelve months (the majority being hacking cases and of course this does not include a large number of unreported issues). It is up by 50% over last year (perhaps because of lockdown and greater use of the internet) and is far in excess of any other type of reported crime.
Criminals are increasingly being drawn to internet-based theft because it is easier to perpetrate and does not involve physical interaction – by breaking into someone’s property and then having to “fence” items to recover cash from the proceeds.
Payment card and cheque based fraud are massively reducing, whilst impersonation, investment based, advance fee and CEO fraud has grown significantly.
An EU survey found that 67% of the UK public had experienced some form of scam in the past 12 months, with the country being near the top of the league table for such criminal activity. The biggest growth area is authorised fraud, where the perpetrator will convince an individual to divulge confidential information which then enables them to complete a transaction. A major issue is that legitimate organisations are acting in a way which helps the fraudsters cause. The NHS for example has sent large amounts of texts to the community on vaccines asking people to click on a link – which is entirely counter to established security protocols. Amazon carried out a similar exercise late this year with a request for some customers to change their payment methods by clicking a link.
Conveyancing, and indeed any financial transaction involving a solicitor firm moving funds around, is an area of risk. Large amounts of money are often sent at short notice on corporate acquisition/M and A projects where there is time sensitivity, and it is sometimes not possible to have the luxury of a double checking process. Probate payments can also be significant.
A corollary of the suspicion and wariness which the British public and firms now exhibit around transactions is that often individuals are difficult to reach because they do not trust the source of contact – and that in turn slow up transactions and inserts a further step in the process, which can sometimes require speed.
Scammers are increasingly sophisticated and camming toolkits are available online to enable them to set up quickly. Common offences such as theft, assault and ringfencing are placed into volume crime by the police but these offences are way below the volumes of internet crime and identity based fraud.
The number and size of client money transactions which are paid out by UK solicitor Insurers are growing. None will divulge the extent due to the sensitivity of the data. The move to enforce separate cyber policies in the future is a result of this fact. In the first half of 2021 42% of authorized fraud losses were paid back to individuals and firms. Whilst some of this was via banks, some is also being reimbursed via the SRA minimum terms policy which law firms are required to carry.
There is a solution to some of the risks and it is available now to firms – that of blockchain technology. It will be ubiquitous within a few years, and it will solve at least the problems of sending client money from one place to another securely.
For information and advice as to how to protect your firm more adequately, please contact Gillian Anderson 07874 867615 or Simon Ong 07842 313626 or email firstname.lastname@example.org.