The third edition of the British Conveyancing Awards is just around the corner. Alongside a new, larger venue and a new headline sponsor in Groundsure, #BCAwards2023 is all about recognising and rewarding the herculean efforts of conveyancing superheroes who, despite hurdles aplenty, continue to go above and beyond to help clients move into their dream home.
Ahead of the splendour and celebration on the 21st March, Today’s Conveyancer will recognise those who help make the event possible through a series of “Sponsor Spotlight” pieces. Here, we speak to Thirdfort, Risk & Compliance Support Service of the Year category sponsor.
2022 saw awareness of fraud in property transactions soar. Why do you think this was?
There are many varying reasons that the awareness could be attributed to.
The regulatory focus and enforcement action has increased, bringing fraud and compliance to the forefront of many firms’ and media outlets’ minds.
The FCA warned last year that financial crime would become more prolific as rising living costs continue to impact households here in the UK in 2023. The cost of living crisis affects households in many ways, including inflation, which affects everything, basic needs, food, energy, and housing. Many people will feel the impact. It will directly impact their individual lives and cause significant financial hardship. It can also extend to include additional factors such as stress, depression, and distress, which often increase the risk of bad decisions and acts of desperation. Clients who were model citizens before may find themselves in situations where they feel they have no choice.
Post-pandemic, the housing market has seen a significant boom in activity. The average UK house prices increased by 10.3% in the year to November 2022. In November 2022, the average UK house price was £295,000. It is no coincidence that as house prices have rocketed, so has media exposure around property fraud, and it is not limited to property fraud. Still, as prices rise, people get into financial difficulty and even repossession, and the demand for rental properties increases. This impacts other areas of fraud, such as fraudulent lettings applications. Fraudsters see all of this as an opportunity.
There is also a much more open dialogue where people now feel more comfortable talking about their experiences, and whilst we have a long way to go, some of the taboo about being a victim of fraud is slowly lifting. Fraud is something that the media has started to document and create fictional pieces around, bringing it much more into the mainstream arena and a topic of interest.
There is, however, still a long way to go regarding eliminating fraud. In what new ways are Thirdfort helping drive fraud out of transactions?
Thirdfort provides rich data from multiple sources in real-time, going beyond the surface to support firms with their regulatory obligations, client identification, verification, and source of funds processes and controls.
Thirdfort enables regulated professionals to share ID verification information securely through the Thirdfort platform. Clients can get frustrated at the number of times within one transaction that they can be asked by different professionals for the same information and supporting evidence. Thirdfort’s SecureShare can reduce timelines and avoid the repetition of tasks, resulting in increased client satisfaction. It can also help simplify processes, which can pay dividends in the long run. Digitalisation continues to expand across the legal sector, keeping businesses moving and people connected.
Thirdfort offers screening options in line with the HM Land Registry’s Digital Identity Standard. There is a growing need for firms to consider digital verification. A process that once involved face-to-face meetings or obtaining certified identification documents can now be achieved through technology.
Publicly available information can easily fall into the wrong hands, making it easier for fraudsters to impersonate the property owner and dispose of the property quickly to cash buyers.
Thirdfort enables firms to conduct electronic verification through our platform in a reliable, independent, and effective manner to mitigate the risk that the client is genuinely known beyond an ID document and address. Knowing your customer has been more difficult through traditional ID verification methods. Therefore, deploying good technology is critical for firms as part of their policies, controls and procedures.
What new challenges will 2023 bring to the security of transactions, and how can conveyancers avoid falling foul?
During times of economic uncertainty, it is prevalent to see a significant correlation between the financial crisis and a rise in fraud and money laundering. Conveyancing can witness the surge and vulnerabilities in the data produced by Fraud Scape data 2022, which demonstrates the evolving risks to society.
Identity fraud cases are up 34% (210,886 cases) on the same period for 2021 and up 23% of pre-pandemic levels (2022 9-Month figures). Inflation is still rising as we kick off 2023. This trend will likely not slow down and will continue to increase in 2023.
Forgeries have reached such a level of sophistication that assessing a physical passport or driving licence is difficult for even an expert with a trained eye. The only way to precisely evaluate whether a potential customer is genuine is by using sophisticated electronic verification, including additional security checks such as biometrics and NFC validation. This will confirm a person’s true identity, drawing on global databases. This enhanced level of compliance can often provide comfort in seconds. Adding electronic verification into your current process can help you protect yourself and your firm from preventing criminal activity and ensure that you are compliant with the relevant legislation.
In addition, conveyancers should remain focused on identifying a client’s ultimate source of funds for the transaction. Fraudsters may not be truthful in the hope that they wish to hide adverse credit information but more concerning criminal property. As such, Conveyancers should remain alert to red flags and risk indicators.
