Money laundering on the rise
30 July 2018
REPORTS OF money laundering, cybercrime and dubious investment schemes all on the rise, says the SRA.
The risks posed to the public and law firms from money laundering, cybercrime and dubious investment schemes have all reached record levels, according to new statistics from the Solicitors Regulation Authority (SRA)
The annual Risk Outlook report highlights data that suggests criminals are increasingly targeting law firms as a means to steal tens of millions from businesses and the wider public.
Reports of money laundering involving firms have risen by two thirds since 2016, with 60 cases reported to us in the first quarter of 2018, compared to just 36 in the final quarter of 2016.
Relating to potential dubious investment schemes, there have now been reported losses of £47.4m since 2015. This has led to more than 100 claims to the Compensation Fund. To help address this, we have issued a series of warnings and acted where solicitors have participated in schemes designed to defraud the public.
Reports of cybercrime are also up 50% year-on-year, reaching a record level of 157 reports for 2017. These cases have brought the total reported client money stolen by cyber criminals to more than £20 million in just two years.
Chief executive at SRA Paul Philip said, "Our Risk Outlook helps solicitors to respond to the risks we see in the sector, supporting firms and protecting the public. Many of the risks we are highlighting are not new, but none of us can afford to be complacent.
“Although we know that very few solicitors would ever knowingly become involved in criminal or dishonest schemes, everyone needs to know the warning signs to look out for. It is important that law firms take steps to protect client money and information. Our recent warning notices on money laundering and dubious investment schemes aim to help them in this.”
For the first time, we are highlighting how claims are managed as a key risk. This follows concerns over issues such as firms failing to properly check on the validity of personal injury claims or charging fees which cannot be justified in areas such as payment protection insurance claims.
The Risk Outlook also reminds solicitors they must not draft the terms of non-disclosure agreements in a way that suggests a person may not report misconduct to a regulator or a law enforcement agency or make a protected disclosure.
The report offers legal professionals definitive, up-to-date information and advice on current risks. The Outlook highlights ten priority risks including money laundering, access to legal services, protecting client money and diversity in the profession.