8 May 2012

SRA acts over identity fraud after series of bogus law firms

A rash of bogus law firms in recent months has persuaded the Solicitors Regulation Authority (SRA) to publish guidance for solicitors on guarding against identity theft.

The SRA has issued six warnings about bogus firms or branch offices of legitimate firms in the past six months, and last week also highlighted a fake website of a real practice.

The fraudsters are listing business addresses that are merely empty offices that have been rented out. The SRA said that while its powers in such circumstances are relatively limited, it has previously secured an injunction against an individual to prevent him from having anything to do with any law firm in the future, and would again if it has sufficient evidence to take such a step.

The SRA said that while the situation is “not seen as a huge problem”, firms are at risk because even if they are said to be the victim of the fraud, they could be held liable for breach of trust in paying away mortgage monies in the wake of the Markandan and Uddin ruling earlier this year (scroll to the bottom of this link).

The guidance highlights some practical steps solicitors can take, such as search on the Internet for their firm’s name since that might bring up a false office, and check firm and individual details on the Law Society’s Find a solicitor service.

It notes that law firms dealing with conveyancing transactions or other work also sometimes become suspicious of firms on the other side and provides a range of indicators of potential problems, such as telephone calls being diverted to a call-back service, generic e-mail accounts that do not incorporate the firm’s name, and a firm based in one part of the country supposedly having a bank account in another part of the country – “this is a strong indicator and has been seen several times”.

SRA executive director David Middleton said: “Any firm that discovers its identity has been stolen should contact us and their insurers and also consider legal action such an injunction either to stop misleading statements or to freeze assets if money has gone missing.

“Firms cannot assume that we or the police can take direct steps to protect your firm. We each will do what we can, but we do not regulate the people perpetrating these frauds and our powers over them are relatively limited.”

Any firm that thinks its identity might have been stolen should contact the SRA’s red alert line on 0845 850 0999 or 01926 439673, or e-mail redalert@sra.org.uk.

 

 

By Legal Futures

Tags: fraud, Solicitors Regulation Authority