By Legal Futures’ Associates Lawyer Checker
Did you know that probate fraud costs in the region of £150m a year? That’s the figure provided by the Society of Trust and Estate Practitioners (STEP).
It’s no surprise that this type of fraud can be committed both by members of the family, but also by organised criminals who use various methods to divert funds away from the beneficiaries.
Probate lawyers need to be aware of the risk surrounding this type of fraud as criminals are taking advantage of it more frequently due to the large quick pay outs that are available.
Probate fraud is considered to be rife and it’s therefore vitally important that lawyers in this area are aware of such risks and ensure that payments are made to the right person, not only to avoid costly pay-outs but also potential actions for negligence.
Emma Baddaley, Key Relationship Manager for Lawyer Checker, attended a round table run by the trade publication Today’s Wills and Probate. She said:
“The probate industry faces the same challenges as conveyancers when it comes to ID checking and verifying their clients are who they say they are.
“At the roundtable, we heard from lawyers, will writers and suppliers of executors that they have a lack of trust when checking client ID because of the rise of fake ID, as well as fake bank statements which might otherwise confirm address and bank details.
“Addressing ID checking when it comes to, not only Executors but also Beneficiaries, is a vital part of the Know Your Client, or KYC, process and the anxiety and concern around this is something the industry has recognised as a hot potato for some time.
“The wills and probate sector must take ID checking seriously. They need to move away from accepting certified copies, emailing bank account information and relying on copies of bank statements as far as possible.
“Embracing the latest ID checking legal technology, which utilises facial recognition, artificial intelligence and FCA approved Open Banking to assist the process, will remove a significant amount of risk, cut down the client onboarding time and the need for face to face engagement. As well as saving money on time and efficiency.
“As a cost neutral method of checking client ID, these technologies are surely the way forward in the fight against probate fraud.”
What about when the time comes to transfer funds from the estate?
This is the time criminals can clap their hands at a job well done, as all they need to do is supply their bank details instead of the beneficiaries, then they’re home and dry.
Running additional checks to confirm whether the bank account details you have correspond to the beneficiary or someone sinister, can prove vital. Preventing you from inadvertently giving a criminal a quick pay day, and avoiding costly pay outs and potential repercussions as a result of negligence.
Tools, such as Lawyer Checker’s Consumer Bank Account Checker provides an extra layer of due diligence, and enables the lawyer to check if the bank account details they have correspond to the beneficiary.
To further highlight the risk of probate fraud, the Solicitors Regulation Authority (SRA) recently published scam alerts purporting to fraud in the probate sector. The warnings concerned an unclaimed inheritance and were both published on 4th December 2019.
One email copied and impersonated a legitimate law firm and solicitor to trick the public into parting with their details.
The messages informed the recipient that they are beneficiaries for an unclaimed inheritance worth in excess of £3,000,000.
As a call to action, the fraudsters requested address, identification and direct telephone number details from the recipient.
The email claims these details are needed to “enable the holding bank”, The Royal Bank of Canada UK Branch, to “proceed with final clarification / reveal further details and documents” about the inheritance.
Whilst such a windfall usually throws up red flags of suspicion, the convincing legal language and explanation is convincing.
Do you want to add an extra layer of protection when it comes to verifying beneficiaries? Request a demo for Thirdfort.