Latest fraud figures should sound alarm bells

Robyn Hall

February 7, 2013

CIFAS has reported a 43% overall increase in the number of staff frauds recorded in 2012 when compared to 2011.

Kevin Smith, operations director at myhomemove, the first conveyancer firm to join CIFAS, said: “We are surprised that no other conveyancers have yet joined CIFAS because in addition to combating internal fraud, the tools we now use also allow us to identify potentially fraudulent clients and indeed law firms”.

The latest CIFAS report refers to all types of major fraud, not just the obvious activities such as cash theft, which means businesses need to focus on several areas of potential threat. With such a notable increase this can only act as an indicator to businesses, particularly in the legal sector, that it is time to focus on prevention rather than cure.

Dev Malle, group sales director at myhomemove, added: “It is astonishing that with the level of media coverage this subject has received that many law firms do not see or understand the level of lender concern in the area of fraud, less surprising may be the inability of many firms to invest into systems and processes that improve the quality of service and provides confidence to the client lender partners, this includes members of staff.”

Lender concerns

The CIFAS report also highlighted the dramatic rise in the obtainment and disclosure of company data, along with a 22% increase in dishonest actions by staff – a big concern for lenders who are becoming more demanding when it comes to data protection.

For many conveyancing firms this may seem like a burden requiring additional due diligence and tighter controls.

Rob Gurney, head of legal practice at myhomemove’s ABS law firm, Premier Property Lawyers, said: “Lenders are often pushing for better anti-fraud measures and we are the first to admit this does take extra resource. However we believe that the benefits outweigh the costs – this is just one additional step that we take in fulfilling our regulatory duties and increasing our confidence in the legitimacy of the transactions we undertake.”

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