The SRA said last week that firms may be running the risk of exposure to money laundering by thinking “it won’t happen to us”.
Laura Holloway, Risk Analyst at the Solicitors Regulation Authority (SRA), spoke on Friday to an all-members meeting of the Conveyancing Association.
She explained that the SRA’s recent thematic review of conveyancing had found more than a quarter of firms had direct experience of fraud or attempted fraud.
Despite this high number she said: “Many firms think — no it won’t happen to us, we know our clients.”
Ms Holloway said that firms themselves highlighted a different risk, saying : “Law firms told us that the biggest risk they faced was their removal from a panel, but this is balanced out by the risk that a firm that should not be conveyancing stays on a panel.
“Instead, the biggest risk facing the conveyancing industry is firms that are struggling to make ends meet, because cutting costs makes them more susceptible to facilitating money laundering activity or fraud.”
The SRA decided to carry out the thematic review because conveyancing generates the second highest number of legal complaints.
Conveyancing was also chosen due to the high proportion of the public that will be involved in the home buying process.
Informal visits from a representative sample of 100 firms provided the basis for the review.
Ms Holloway explained “It is important that we as the regulator understand what issues face the firms we are dealing with, so that we can improve the work that we do and ensure our resources are directed in the most effective way."
Eddie Goldsmith, chairman of the Conveyancing Association, said: “We welcome the SRA’s efforts to learn more about what our members are contending with, and look forward to their supervision and enforcement strategy.
“It is clear that as budgets stay tight, firms must nonetheless remain vigilant to fraud and money laundering. This is why the Conveyancing Association is running regional workshops for its members to help their staff to understand their responsibilities when it comes to financial crime.”
A lively debate followed the SRA presentation, with many members calling for the SRA to take more preventative steps such as proactively targeting “£99 conveyancers”.
