More accuracy, more confidence and less fraud – KYC made even better

For some time, a growing issue for conveyancers has been criminals actively targeting property transactions with the aim of tricking law firms into transferring the proceeds of sale and/or the beneficiary of an estate to them.

Missing money is every COLP & COFAs worst nightmare, and the active and fraudulent nature of criminals impersonating a law firm is just one of several types of conveyancing fraud that have caused law firms and their PII insurers significant headaches over the last decade.

In July 2022, a law firm owner who fell victim to conveyancing fraud and transferred £68,000 to a bank account without checking the details was rebuked by the Solicitors Regulation Authority (SRA).

There are a variety of tactics now employed by firms to combat this risk, including using secure portals, layers of manual processes and using third party data providers such as Experian and Equifax to verify that the account where the money is being sent to is correct.

Historic cases of fraud in this area have shown money being deposited by law firms into accounts hastily created by fraudsters. Understanding the length of time an account has been open and a snapshot of what has been going on in that account, could highlight risk and potentially act as a vital barrier to this type of conveyancing fraud. It’s also in the client’s interest to protect themselves from fraud, and to ensure the funds are transferred directly to them.

In 2019, the Law Society Conveyancing Quality scheme introduced this concept into their standards and told firms to check:

‘…that the account bank account is properly constituted as an account conducted by the seller for a period of at least 12 months. Confirm that remittance will be made to that account only.’

A central source of truth that protects all parties

The team at Armalytix have developed an account verification check that enables the client to confirm the account they want the proceeds to be paid into via Open Banking. The report enables the law firm to see the name, type of account, sort code and account number, alongside whether the account has been open for 12 months and a snapshot of that period.

The beauty of using Open Banking to conduct this check over historical methods is that it is a central source of truth with no room for manipulation. More accuracy, more confidence and less fraud.

The Armalytix account verification check is simple, quick and effective. Save yourself and your clients from this type of fraud – and with it the financial and reputational damage.

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To understand more about Armalytix, book a demo here.

By The Armalytix Team — 16 May 23

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