Friday 04 May 2012 by John Hyde

Law firms could be held liable for losses caused by a fraudster stealing their identity even when they are innocent victims, the Solicitors Regulation Authority has warned.

New guidance published today warns the profession on how to guard against falling victim to fraudsters. The regulator says 'a number' of fake firms have struck in recent years with con men posing as a bogus branch of legitimate practices, listing business addresses that are merely empty offices.

The SRA says it is important that firms are proactive about guarding against identity fraud as little that can be done once it has taken place.

SRA executive director David Middleton said: 'Firms are at risk because even if they are said to be the victim of the fraud, they could be held liable for breach of trust in paying away mortgage monies.

'Firms cannot assume that we or the police can take direct steps to protect your firm. We each will do what we can, but we do not regulate the people perpetrating these frauds and our powers over them are relatively limited.'

The SRA has published guidance on avoiding identity theft, with advice on what to look out for and preventative steps firms can take.