6 figure settlement for victim of fraudulent bank details email scam

Email scams are becoming increasingly common in the UK. Email accounts often contain a large amount of personal information, making them a valuable target for hackers and fraudsters writes Slee Blackwell’s Jodie Barnes.

No area of business appears to be immune from attack; including the legal sector.

The case of Mr G is a typical example of the problems solicitors now face when handling client funds:

• Lawyers, “H & Co”, were instructed by a Mr G to manage the sale of his late Mother’s estate.

• A few days before completion “H & Co” received an email purporting to be from Mr G providing details of a new bank account to which they were instructed to transfer the proceeds of sale.

• H & Co confirmed the new arrangement and a few days later electronically transferred the monies to the specified account.

• Mr G did not receive the funds.

• H & Co made enquiries and discovered that an unknown third party had hacked Mr G’s email and had withdrawn the monies from the bogus account.

Mr G took legal action. He argued that the Solicitors Accounts Rules 2011 made H & Co strictly liable to account to him for the missing money. It was claimed that by acting upon the email, H & Co had been negligent and were in breach of their retainer.

H & Co’s professional indemnity insurers conceded that the solicitors were responsible for the loss caused by the scam. The solicitors should have checked the client’s bank account details against the money laundering information provided and only accepted notification of a change after a telephone conversation with the client and satisfactory answers to security questions being given.

The case serves as a timely warning to all lawyers handling client funds. Solicitors need to be vigilant and alive to the risk of email scams, hackers and fraud. The duty placed on a solicitor is a high one and if a client falls victim the lawyer could easily end up making good any losses.

There are often key factors associated with scams and frauds that should raise suspicion. Things to look out for include:

• Whether the message is unsolicited

• Whether the email contains spelling mistakes that are uncharacteristic of the client

• Whether it refers only to details that could have been obtained from previous emails?

If you have been the victim of an email scam or fraud and wish to know whether you would be entitled to bring a claim against a professional advisor for compensation then call us on 0808 139 1595 for free initial advice.

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