I have worked in the finance department of law firms for over 20 years starting as junior gaining experience and qualifications progressing through to my current role as the Head of Accounts.
I have always felt a strong sense of responsibility towards our clients, but never more so than when I started working in the Equity Release sector where the average age of our clients is over 70 years old.
Elder fraud is a significant risk factor and concern. As expert equity release solicitors’ firm we have robust policies and procedures in place to safeguard our clients against fraud. Legal cashiers are responsible for ensuring that the financial transactions related to the equity release are handled accurately and securely and are therefore the last line of defence against nefarious activity by parties looking to defraud out clients.
Circumstances can make anyone vulnerable. It can be tricky to define who is and is not vulnerable. At Tivoli Legal we chat with our clients to gather information about their transaction, listen carefully to their objectives and address any worries that they may have. We use this together with our experience to build up a full picture to assess whether additional support may be required. A key part of this picture is the financial advisers whom we enjoy close working relationships with. This combined approach creates strong defence against potentially fraudulent behaviours.
As solicitors, we are duty bound under our Code of Conduct to act in our clients’ best interests. As good citizens, who care about our client’s wellbeing, we wish to protect our elders against being exploited.
As the Head of Accounts with the ultimate responsibility for client funds my team is the very last line of defence. I am always vigilant for hallmarks of inappropriate activity which may raise a concern. Often there is no cause for concern once further investigation into the circumstances and / or communication with the client(s) has occurred but diligent awareness of potential issues protects our clients.
I make no apologies for conducting sensitive enquiries and investigation into cases of possible concern because this can circumvent fraudulent activity.
Considerations on every file are:
- Is the ER money going directly to the client? Under the Solicitors Accounts Rules, we must not act as a bank. Funds can only be released to the client(s) unless there is a legal and specific reason otherwise e.g., paying off an existing charge. If there is a request for funds to be paid to a third party or the bank payee details do not match the client’s name(s) why is this. Is this on the transaction file?
- If a joint application, best practice is for funds to be paid into a joint bank account. If the payment request is to a sole account, do we have the relevant authority forms from both applicants and have we discussed the risks with the applicant who is not receiving any funds.
- Fraudsters can easily intercept emails and alter bank details to their own:
- Have bank details been received, checked against a bank statement, and verified verbally with the clients.
- If there has been a last-minute change of bank details has the change of account procedure been carefully followed.
- Have pre-completion calls taken place with both applicants seeking authority to complete.
A diligent equity release solicitor with responsibility for the client’s transaction will always perform checks to ensure that they are fully satisfied regarding clients’ identification, mental capacity, duress, and anti-money laundering sanctions at the outset of the transaction.
An ongoing good working relationship between solicitor and clients reduces risks significantly and experienced solicitors will be alive to the hallmarks of unusual activity.
As the last line of defence at the end of the transaction before the funds leave our account the Cashier’s role is a vital component.
We are a team. We support each other to support and protect the clients and everyone within our team at Tivoli will satisfy themselves as the veracity of the transaction.
How can we safeguard against elder fraud as a firm?
- Client verification and communication – clear procedures for verifying the identity and capacity of elderly clients, maintain open lines of communication with clients and being vigilant for any unusual activities, behaviours or change in circumstances.
- Staff Awareness and Training – All staff members trained to recognise the potential signs of elder fraud.
- Due Diligence – Conducting thorough background checks on all new equity release clients, including electronic verification to HMLR Safe Harbour standard.
- Independent Financial Advisers – working collaboratively with the client’s adviser ensuring that the client’s best interests are protected.
- Undue Influence – vigilant throughout the transaction for the signs of undue influence, manipulation or pressure on the client coercing clients into taking out an equity release for the potential fraudster’s personal gain.
- Internal Audits – Conduct regular internal audits of the client files and client
Safeguarding against elder fraud requires a combination of vigilance, training, communication, and ethical commitment. By taking the above steps we can help protect our clients from exploitation and uphold the trust and reputation of the industry.