Cybercrime initiative recovers £4m lost to conveyancing fraud

Set up by specialist insurance business Pen Underwriting, in conjunction with UK law firm Mills & Reeve, the team has dealt with 14 cases to date and recovered 55% of the money.

In three cases the full amount was contained and recovered and in one instance, £1.13 million was stolen in a cyber-attack, of which £1.10 million was recovered.

The initiative enables affected customers to contact a specialist fraud response team, allowing Mills & Reeve to take immediate action to preserve, trace and recover the funds.

Email modification fraud accounted for 80% of cybercrime incidents reported to the Solicitors Regulation Authority in the second quarter of 2018. When used to steal conveyancing money it is also known as 'Friday afternoon fraud', whereby large sums of money handled electronically by law firms at the completion of residential and commercial conveyancing transactions are targeted by cyber-attacks.

Billy Hinken, head of financial lines and specialty claims at Pen Underwriting, said: "House purchases are often the most expensive payment that people will make in a lifetime, so it is no surprise that fraudsters line up this veritable treasure trove as a prime target. The swiftness of the Fraud Helpline and Response initiative and its clear set of protocols enable immediate and effective reaction, maximising the chances of blocking, preserving and recovering stolen funds for insurers.

“In many cases, by the time a notification hits the inbox of a client’s broker we and the specialist team of lawyers at Mills & Reeve are already progressing matters with banks, the police, overseas lawyers, IT and data specialists and other experts, giving us the best possible chance of recovering part or all of the stolen monies.”

Tom Filby, principal associate at Mills & Reeve, added: “The reaction to fraud is often time-critical and the scheme we have developed with Pen provides us with the tools to take all necessary and immediate steps to preserve and recover stolen funds before it is too late.

“Through its proactive and attacking approach, the scheme has delivered impressively effective results. There is also a strong public service perspective — we have already helped the Police and CPS secure a criminal conviction in a £1 million fraud with further criminal cases in the pipeline, running alongside the civil actions and recoveries that we are bringing against the fraudsters.”