A key figure in banking has warned of ‘almost epidemic’ levels of fraud in the legal sector.
Steve Arundale (pictured), head of professional services for commercial banking at NatWest, today became the latest industry expert to speak out about the prevalence of fraudsters tricking law firms into giving out their bank details.
In recent weeks, insurers and regulators have warned about the dangers of so-called ‘vishing’ (voice phishing) scams, where fraudsters pose as bank representatives to extract sensitive information.
Professional indemnity insurer Elite dubbed the practice the ‘Friday afternoon scam’ as the perpetrators target times when firms have large amounts in client accounts.
Speaking at the 360 Legal conference in London today, Arundale said banks have similar concerns about the vulnerability of the legal profession.
‘In 2014 losses through vishing went up by 300% – the cost of fraud is moving from millions to billions,’ he said.
‘Fraudsters know [law firms] have quite a lot of cash and you deal with lots of different people working to tight deadlines.'
Arundale advised firms to take preventative measures such as ensuring two people have to agree before any information is passed on.
‘Where there are gaps in your systems then fill them immediately,’ he added.
Meanwhile, the Solicitors Regulation Authority has reiterated its warning to firms not to be duped into disclosing bank security information, following reports of more practices being targeted by telephone con-artists.
Another two cases have been reported this month of fraudsters posing as bank representatives – following on from four firms falling victim of the scam in November last year.
The callers use refined techniques to gain the confidence of those they call - known as social engineering - and obtain information enabling them to access accounts. They ask for ‘challenge and response’ codes, which are then used to authenticate payments and in some cases digital banking logon and password credentials.
Robert Loughlin, executive director of operations and quality, said: ‘We are very concerned about this increase in activity. The con artists are highly sophisticated in their approach and their script makes them sound as though they are genuinely who they say they are, even though what they are doing is trying to obtain confidential information.
‘It’s not just ourselves at the SRA who are concerned about this increase in activity. Time and again solicitors across England and Wales are raising it as a serious issue during our discussions with them.’