Conveyancers should be aware of the dangers of “identity fraud”, where criminals adopt a legitimate name of a law firm and use that name as a front for an illegal enterprise.
Sebastian O’Kelly, writing in The Mail on Sunday ran a piece two weeks ago about a family involved in a scam conveyance. They were contacted in April by a London estate agent about a house where the seller was after a quick sale. With no time to sell their existing house, the buyer borrowed £800,000 from family in order to clinch the deal, and instructed Pamela Murphy of Schubert Murphy. Through the estate agent, Ms Murphy was put in contact with Acorn Solicitors, acting for the seller. Acorn then repeatedly tried to speed up the process, which was completed in three weeks on May 21. On June 9, the new owners received a notice of eviction. The house had been repossessed by Lloyds TSB, to whom the owner owed £843,000, with a repossession order granted in December 2009.
The bank had sent in bailiffs in April, who found that the property was let to a family with young children. The family’s own lawyer didn’t realise it was a scam and is now disputing her client’s claim that she acted negligently. It seems that the fraudsters simply trawled the Law Society website, picked the name of a legitimate legal firm, Acorn Solicitors based in Taunton, and set up the bogus firm with the same name to perform the “smash and grab” scam.
The Law Society denies wrongdoing, although it carried details of the bogus Acorn Solicitors, based in Rotherham, on its website – and kept them there for six weeks even after the Solicitors Regulation Authority (SRA) was informed that the practice was a criminal sham and police were investigating.
Commenting on their regulatory role, the SRA said: “Of course we regret that the information on the findasolicitor site was not amended promptly, however there was no risk to the public as the firm’s contact details were not operational at that time. The SRA is only able to regulate law firms and the illegal enterprise was not a legal firm for the purposes of falling under our authority. This is in fact a police matter and of course we are helping the police as much as we can.” ‘
This practice has been abandoned and the persons behind it are being sought,’ say South Yorkshire Police, who are investigating the fraud. The SRA will be issuing guidance to firms concerned about this form of identity theft, and puts solicitors on notice to check the internet for any firms who may be set up with the same or similar names to their legitimate practice.
The fact remains that the SRA website only issued a warning to conveyancers two weeks after the Mail on Sunday had reported the issue to the public at large.
Questions remain about the SRA’s ability to deal with criminals who may be holding themselves out as lawyers or conveyancers without any legal qualifications. Although the SRA has expressed regret about its lack of prompt action in advising the Law Society to remove the fraudulent details, it is not able to require that the illegal firm itself remove adverts as its authority is only binding on the legal profession. In this internet age, is it acceptable that it takes several days or even weeks for SRA decisions to be posted on its website? In this case there was a delay of almost two weeks between a complaint being made and the public put on notice about Acorn Solicitors. In other SRA tribunal decisions the delay may be much longer.
What chance do legitimate conveyancers have of avoiding fraud when the SRA is two weeks behing the Mail on Sunday on highlighting imposters posing as solicitors?