Financial Fraud

Financial fraud is a crime which involves deception of financial transaction for personal gain. It involves complicated transaction usually conducted by “white collar criminal” such as business professionals. Financial Fraud is an increasing problem across industries and this could be due to the difficulty of checking identities of companies and individuals as it is easy to set up fake websites, steal personal information and change IP location. The ease of using the internet contributes to making internet fraud a growing problem.

Financial fraud results in catastrophic losses each day, Financial Fraud Action UK reports that in 2016, the UK lost £2 million each day and a total of £768.8 million, an increase since 2015.

There are many methods of financial fraud, it can be through post, phone calls, emails or even face-to-face interaction.

The developments in technology, and the easiness of the conducting transactions over the internet without face-to face interaction increases the threat for the financial industry as fraud opportunities are ever-growing.

Law firms are especially in risk, as it is one of the most targeted sectors due to its sensitive nature. The consequences are extremely serious. Client funds and records are at risk, and solicitors will be held responsible and will be subject to pay money to lender as well as lose their reputation and suffer brand damage. Simple actions such as sending emails which includes bank details can put the firm at risk.

The Guardian Reports that during the first half of 2013, every fifteen seconds a financial scam was committed. Some of these scams include fake law firms and lawyers. Dovernor, which is a scam law firm website, looked very convincing as pictures of staff and information was stolen from a legal practice in the USA. These law firms take advantage of vulnerable people who need lawyers, and

This isn’t only occurring in the west, in Hong Kong, Two individual, aged 30 to 48, were said to have posed as directors of two different law firms. The Solicitors Regulation Authority reports “more and more reports” of these incidents by day.

There is however a lot that firms can do to protect themselves and reduce the risk, companies should not only hire specialists who should keep up with the growing technological threats but should also train their employees to become more diligent with every-day information, such as noticing changes in email addresses.

It is of the utmost importance to increase the alertness and vigilance of employees, however clients and investors should also be aware. For investors, it is important to always be suspicious of opportunities which sounds “too good to be true” or say you have to act quickly. Regarding technology, ensure your firewall and antivirus software is up to date, never click on links from emails or send your PIN number over email or phone.

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