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Solicitor tricked into transferring £734k of client money to phone-scammers

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Internet banking scam hits legal profession

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A Guildford solicitor has revealed her anguish after being conned into transferring close to a million pounds of her clients’ money to criminals.

Sole practitioner Karen Mackie took a call in April which claimed to be from her bank warning her that her clients’ accounts had been compromised — and as a result ended up moving £734,000 into new accounts in £99,000 chunks.

Having realised soon after that she was the victim of a scam Mackie went to the police and the Solicitors Regulation Authority (SRA), which suspended her — partly because this allowed her clients to access to the Solicitors Compensation Scheme, which refunds such losses.

Since then Mackie (whose LinkedIn is pictured below) has appeared as a small entry on the SRA’s website, which notes her failure “to comply with the accounts rules and principles made by the SRA” and that she “has been suspended with immediate effect”.

Karen-Mackie

But a wrangle with her professional indemnity insurers — who are refusing to pay out — saw Mackie go public about her situation in an interview with the BBC’s Money Box programme over the weekend.

The insurers say that even if the solicitor had not been dishonest herself, she had effectively “condoned dishonesty activities” by others, adding:

Ms Mackie is a solicitor who represents a risk to the public and cannot be trusted with holding client money.

Mackie is distraught about this, and has charted the details of the scam to in a bid to show that it was genuinely sophisticated.

First, she took the call from a woman claiming to be “Joanne Howard from NatWest” saying that one of her accounts had been compromised and asking her to phone the number on the back of her debit card, which is the bank’s helpline.

Mackie ended the call and phoned that number.

But she did so immediately, meaning that due to a standard BT delay clearing the previous call she was put straight back to “Joanne Howard”, who gave her more bogus information and told her NatWest would call her back the next day to shift the money to “safe” accounts.

Which is exactly what happened — only the accounts weren’t so safe. £222,000 was subsequently retrieved by the bank, but the scammers got away with the rest.

The news comes after an unnamed non-legal Suffolk company fell victim last month to a £1 million phone scam — the biggest ever thought to have occurred in the UK.

Yet it seems that some law firms may have suffered greater losses. The SRA indicated to Money Box that Mackie isn’t the only lawyer to have been conned this way, with others apparently having transferred seven figure sums to crooks. The regulatory body says three to four law firms receive these calls each week.

22 Comments

Anonymous

Feel sorry for her. A cock up, but not dishonest nor deserving of such bad treatment.

Insurers should pay out and she should go on a number of money handling training courses to prevent a recurrence.

(35)(4)

Pantman

I feel sorry for her about the insurance issue, but that’s insurance companies, they wriggle whenever they can. But, this is a widespread fraud technique (“hang up and call the ‘safe’ number”) that has been widely reported – she should have known better.

(6)(1)

Anonymous

Agreed. Should call back from a mobile in these circumstances where they call your office line.

(11)(0)

Bruce Dawning

Yeah, there have been so many cases and warnings have been issued about these kind of bank impersonators. I always find some of the reports filed at sites like http://whycall.me. She should have been aware of them. It’s easy to find such scams. Yeah, poor woman. Feel very sorry for her.

(1)(0)

Strategos

This underlines the risks inherent in running a small law firm. Small firms lack the resources to provide the types of accounting checks and oversight that may have stopped this. One good reason for law firms to get larger so they have sufficient resources to build a better back-office.

(9)(1)

Anonymous

A valid point, but her insurance premium should have reflected the increased risk.

(8)(0)

Anonymous

I feel so sorry for her.

(8)(1)

Anonymous

No excuse for such stupidity.

(5)(5)

Lady Joanne of Howard

HAHA! Once again I have bamboozled a peanut-brained member of this ghastly so-called ‘profession’ and proven once and for all that I am a true Mozart of the telephone! Little did this foolish wench know that it was really ME speaking in a shrill falsetto. I fully intend to spend my gains on the lifetime Brazzers subscription that I have always deserved.
I’ll be adding another ribbon to my esteemed wardrobe as a result of this delightful escapade, I can tell you. I’ve already warmed up the exact spot on my left nipple where it will go.

To GOD and MYSELF be the GLORY!
Legally yours, with utmost law,
The Rt. Hon. Field Marshall Archbishop Lord Harley of Blacker LJ MR AG QC LLD DPhil MD PhD EdD PharmD LLM LLB MA BA ReKT

(2)(15)

Fuqua

The Lord Harley shtick is way too worn pal, better give it a rest. E

specially as this poor woman will be likely losing her home as a result of the scam. Definitely not a laughing matter.

(19)(3)

Anonymous

He’ll go for Proudman schtick next. #tiresome

(9)(2)

Anon

I’m divided on this. I am shocked she bought the “your client account is under threat” line and then (as per the BBC article on this http://www.bbc.co.uk/news/business-34425717) divided the £700k-odd in to £99k chunks in to separate accounts. I cannot see how she thought this was legit.

Still, I do feel sorry for her as she obviously panicked and as (I think) a sole practitioner she probably didn’t have many people to ask for quick advice. I also didn’t know that BT keep landlines “open” until the maker of the call disconnects.

(4)(0)

ALC

SRA strike again. They are a complete disgrace!

(1)(0)

Un Amused

Do they have universities in Essex?

(0)(0)

Anonymous

University of Essex has been going for a long time.

But, as one suspects, if your question was directed as an insult towards the woman in question then you need to grow up.

(7)(2)

Lord Lyle of the Isles

So she’s disappeared almost 1 million pounds of client money. The public need protection from solicitors like this. She needs struck off. To be blunt about it, she’s simply too stupid to be a solicitor.

(3)(2)

Anon

Where did they manage to find an atm that spit’s out 500k???? Who did the ‘new’ account belong to??? Isn’t there a ‘clearing’ system that delays instant transfers -try paying your credit card online and it takes 2-3 days for the money to appear.

(0)(0)

retiredbrief

Sorry but this is crass incompetence. Over £700K!! And she didn’t think it necessary to speak to her relationship manager?
I am not surprised they are not making it easy for her. Will pay up in the end, I expect.
Terrible publicity for responsible sole practitioners and smaller firms.

(1)(0)

Mjhmj

I was horrified by the scam when I first heard the tale on Moneybox, as I was unaware of it. But, on reflection, I do wonder why the solicitor transferred the money without at least consulting colleagues, especially when the scammer explained that the money would be broken up into smaller amounts. I was even more surprised, when the reporter explained that she had sent someone else to the bank the following day, to check up. I’d have expected anxiety about such large amounts of money to have merited cancelling or postponing other work to check personally. Sending someone else seemed to me to be what someone actually involved might well do to start the ‘leaking’ of the news. And – most of all – if I am not mistaken, I believe the programme mentioned that the solicitor had already had money problems. Yes, it’s possible that she is completely innocent, and I hope she is – but I wouldn’t yet stake my own money on that being the case.

(0)(0)

Eric Golding

I wrote two posts on Linked in in connection with cyber crime and as you are reading this article you will find interesting.

(0)(0)

Anonymous

she was not scammed her clients were and the delay in the clients getting their monies could have caused the clients real stress when the situations most of them were already dealing with financial hardship. she deserves everything that comes her way.

(0)(0)

Anonymous

A month to come up with that?

Not worth the wait, bro.

(1)(0)

Comments are closed.