13 August, 2014
There have been a number of reports of bogus offices being set up as clones of legal practices in order to steal mortgage loans or advances or even client/account information. CLC firms need also to be aware that there is a risk that their own firm might be cloned, with their own letter-heading, website, email and telephone number being controlled/falsified for these purposes.
Steps to protect yourself:
• Continue to be alert for suspicious activity or transactions e.g. a transaction which others believe you are involved in when you’re not;
• Undertake internet searches for your firm’s name, or your name, or those of partners and staff, to see if there is anything suggesting a false office/identity/website;
• Check details with Companies House and Directory Enquiries;
• Check all contact details for your firm are correct on the CLC’s licence register – and again following licence renewal.
If you believe your firm has been cloned, contact the CLC, your insurer, and if appropriate, the police; consider whether to take legal proceedings.
How to avoid dealing with bogus or cloned firms:
• Look out for CLC or SRA notices regarding particular bogus firms;
• Bank account name or details are different from the firm’s name and details on the relevant register;
• The account is held overseas (in breach of both CLC and SRA regulatory requirements), or is based in a different part of the country;
• A branch office is located a considerable distance from its head office without obvious reason, or a firm, not obviously connected to the area or to other local firms, suddenly appears;
• Letterhead errors/variance;
• Telephone numbers which have no land-line facility, are inconsistent with those the firm usually uses, or which divert to a call-back facility;
• Email addresses which do not incorporate the name of the firm, or which are generic/appear personal, or which provide a variance of the firm’s name;
• Speak to the head office to verify that the individual works for them (once you are sure it is the genuine head office) and on the contact details they have provided, call the person on the number provided by the head office to check they are the person you have been dealing with;
• Do not assume that because a firm provides a registration number, or other details from a register, that they are that firm, and do not invariably accept a firm’s claims that the register’s details are out of date. Not all of these indicators in isolation mean necessarily that the individual is a fraudster but taken together they are important indicators of bogus firms which should not be ignored and should help you to do your best to satisfy yourself that a firm is legitimate. The prevention, detection and mitigation of mortgage fraud, money laundering and terrorist financing is a regulatory responsibility requiring appropriate systems and controls are in place. These controls need to respond to changing risks. Being caught out by a bogus firm can also impact on the cost of professional indemnity insurance.