How does Lawyer Checker protect client money in conveyancing?
Conveyancing fraud is increasing rapidly, and a critical area of increase is within Payment Diversion Fraud. Criminals often fake the details of an accredited seller or buyer's solicitors and intercept client money sent to buy a property. The client is left with no money, no new home and a claim against the solicitor acting for them.
Lawyer Checker was founded in 2011 to provide comprehensive fraud protection to conveyancers, their clients and the sector. It is designed to protect lawyers when transmitting funds from one conveyancer to another. Unlike the SRA Check a Solicitor service, Lawyer Checker doesn't check an individual solicitor; it checks the solicitor/conveyancer's client account used in the property transaction.
Since its launch, the digital solicitor bank account checker has become a part of the conveyancing process adopted by most solicitors and conveyancers. This article explains in more detail what it is, how it helps you as the client, the cost of it, and whether it's something you can do yourself... and save money!
In June 2024, Lloyds Bank Plc reported:
- Conveyancing scams increased 29% in 2023.
- Victims losing £47,000 on average, but for some it’s more than £250,000.
- Around 45% of victims aged 39 or under, so first-time buyers may be at particular risk.
Source: Lloyds Bank Plc
What is Lawyer Checker, and how does it work?
Lawyer checker is a service that enables your conveyancing solicitor to check the previous use of a solicitor's client account where they are sending funds. It reduces uncertainty in identifying the legitimacy of the vendor conveyancer by enabling your conveyancing solicitor to assess the risk associated with the transaction.
Your conveyancer enters the other firm's client account details, and the lawyer checker instantly assesses whether the client account has a track record of previous use in the conveyancing market or whether it presents a potential risk.
Where a potential risk is highlighted, other checks are performed to provide the conveyancer with information to help them determine whether they should accept the undertaking offered to them.
The lawyer checker requires details such as the seller’s solicitor’s company name, sort code, account number, and postcode. Once these have been entered, it instantly gives one of three returns regarding the account in question: frequent, infrequent, or unknown.
Frequent
If lawyer checker returns a frequent result, it confirms that that particular solicitors’ bank account has been used regularly by other firms to complete conveyancing transactions, or that the account is registered for that particular solicitor's firm against the address given and also that the firm has used that particular account to lodge applications through the Land Registry portal online.
Infrequent
If the lawyer checker returns an infrequent result, the bank account isn’t registered against the solicitor firm’s provided details or is infrequently used for conveyancing transactions. An infrequent result could, however, also mean that the bank account being used has only recently been set up.
Regardless, when 'infrequent' is returned, Lawyer Checker conducts further tests on several conveyancing-related databases to build a more authoritative report on the firm in question, such that an informed decision can be made about whether to proceed.
Unknown
If Lawyer Checker returns an unknown result, the account details have not been recognised, and there is no record of conveyancing transactions using it. Just like for an infrequent result, the lawyer checker conducts several further tests on the account to provide your conveyancer with as much information as possible on whether to proceed with the conveyancing with that solicitor.
The SRA endorses lawyer checking facilities
"…consider using systems such as any of the firms that offer lawyer checking services, as befits the law firm's particular circumstances, to verify that what is described as the contact or bank information for a third-party law firm is genuine."
Source: Solicitors Regulation Authority Risk Outlook 2017/18
What are the benefits of a lawyer checker (real-life example)?
According to various media reports, a lawyer checker recently saved a south-eastern property law firm from losing £375,000 of client funds to fraudsters.
During a real transaction, the buyer's solicitors - Hayward Moon, a conveyancing firm based in Ipswich - received a bogus email purporting to be from the vendor's solicitor. The firm fed the details on the email into the lawyer checker, and a red flag was raised.
The vendor's solicitors' firm was actually local and, therefore, known to Hayward Moon, and its bank account details were known; there had been no suspicion at Exchange of Contracts. But Hayward Moon had chased the firm for replies to requisitions in the lead-up to the completion date and had had no success.
The requisitions were replied to by email at the last minute. Still, the bank details differed from what Hayward Moon had previously received, which gave the accounts department cause for suspicion. When reported, this caused the fee earner to use a lawyer checker.
Unknown result returned
The result was returned as unknown, so the fee earner checked an internal safe list, which raised suspicions. The fee earner then emailed a partner at the other firm to get confirmation that the account details had changed. She received an email from the partner, apparently telling her to proceed with the new details.
But the fee earner persisted in trying to get through to the firm by phone, and only then was it confirmed that the bank account details given in the email were not genuine and that the email purported to be from the partner was bogus—the person dealing with that particular file wasn't in the office at the time and could not access his email account.
It transpired that the vendor firm had tried to email Hayward Moon, but using an incorrect email address. It sent over the replies to requisition using this email address. Still, the fraudster/s most likely intercepted the communication and released the email with amended bank details on the morning of completion.
The fee earner mentioned that they acted impeccably. Using the lawyer checker here instigated the chain of suspicion, which caused the attempted scam to fail. Had the scam been successful, a client would have lost nearly £400,000, and two conveyancing solicitor firms would have severely damaged their reputations.
What does lawyer checker cost?
It costs you £19 when our conveyancing solicitors use Lawyer Checker to protect you by verifying if the other side's solicitors and the account details they've given are genuine.
When do our solicitors use the Lawyer Checker?
When you instruct our solicitors to conduct the legals for you when buying or selling a home, one of the first things they do when opening your file is to contact the solicitors acting for the person selling the property to you.
Suppose our solicitors have never dealt with that solicitor before. In that case, there is no past history to rely on regarding the safety of that firm and, in particular, the account they nominate for payment of your deposit and completion monies. In this situation, our solicitors use a lawyer checker to ensure they can proceed safely.
Andrew started his career in 2000 working within conveyancing solicitor firms and grew hands-on knowledge of a wide variety of conveyancing challenges and solutions. After helping in excess of 50,000 clients in his career, he uses all this experience within his article writing for SAM, mainstream media and his self published book How to Buy a House Without Killing Anyone.
Caragh is an excellent writer and copy editor of books, news articles and editorials. She has written extensively for SAM for a variety of conveyancing, survey, property law and mortgage-related articles.
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