In this article we will cover:
What is the financial check?
Financial checks through Legl are searches to identify if your client has a history of CCJs, bankruptcies or debt collection searches. Financial checks are not hard credit checks and therefore you do not need permission from your client to complete a check. However, clients should be notified that you are disclosing data to Equifax as a credit reference agency and how that data could be used.
How do I run a financial stand alone check?
Financial checks can be ran in two ways:
Within a Workflow
An In-person CDD check
You can run these at any time in the client lifecycle to de-risk the transaction and ensure you have the full financial picture for your client.
When should I use this?
Common examples include:
Screening throughout a conveyancing transaction
Before the transfer of settlements for family and private client work
UBO screening during commercial transactions
Workflow Financial checks
You can create a workflow and add the step "CDD report"
You can then select Financial Screening:
When you send an engage request with this workflow, the client will complete a stand-alone financial check.
Please see the guides below if you need assistance:
In person CDD Financial checks:
Once you select Run in person CDD, You will be given the option to select "Financial Screening"
Please see the guides below if you need assistance:
The first time you complete a financial check through our In Person CDD option you will be asked to confirm that you have informed your client that you are completing these checks as part of your regulatory requirements during their matter lifecycle.
You will only be asked to agree to the terms of use once, the first time you use financial checks in the In-Person screen. Please get in touch with the administrator of your Legl account to understand how your firm is running this process if you are unsure.
We are aware that law firms will have different processes for completing client due diligence. This may be an opportunity for you to review your current process and provide enhanced information to your client’s on data privacy. If you are signing up prospective client’s to privacy policies and T&Cs before any work is commenced you could consider adding the following wording:
“As part of firmname client onboarding and due diligence process (the “Purpose”), firmname will collect personal data from you. In connection with the Purpose, you acknowledge and agree that your personal data will be disclosed to Equifax Limited, a credit reference agency (“CRA”). The CRA may keep a record of that information and provide it (and the fact that a search was made) to its other customers for the purposes of verifying identity, to assess credit risk and to prevent fraud, money laundering and to find debtors. For further information on how CRAs process your Personal Data, please refer to the CRA Information Notice.”
In addition, you may want to consider updating the client care communications Ayour firm shares with clients as part of your service (i.e ToBs or letter of engagement etc);
We use the services of Legl to provide secure digital identity verification, online payments, and to share key documents as part of our client onboarding process, in line with SRA regulation.
All information provided is securely processed by Legl using the highest security standards to encrypt your details and keep your personal data safe.
You can find Legl's Terms of Use here [LINK https://www.legl.com/terms-of-use] and Privacy Policy here [LINK https://www.legl.com/privacy-policy].
You can find our terms here- [LINK to your terms where the above language is included]
What data sources do Financial checks run through Legl include?
County court judgements (CCJ): a judgement made against a court that someone owes an individual an amount of money. Person A owed Person B, but they kept ignoring it, Person B can go to court and get them to recognise this. After the judgement is made, this will now be on the person’s credit record for 6 years (regardless of the time to pay after this judgement).
Bankruptcy judgement: also a type of county court judgement made that a person owes someone money, the difference is that it also states the person is bankrupt. Once the person’s assets have been cleared, no one can claim debt against them. Particularly important for firms because if you can see your new client is bankrupt it could be an indication that they cannot pay their legal bills but also crucial if you act for lenders in a conveyancing transaction
Debt collection searches: whether the client has had any credit checks made against them by someone from a debt collection agency. This will then be surfaced. This is considered an amber flag, it does not mean they are in debt but are being followed up on by an agency.
Financial Checks are only available for clients with UK addresses.
For further assistance, please contact us at [email protected].