NEWS

News and information from the world of
regulatory compliance and risk management

Firm fined £20,000 for inadvertently aiding conveyancing fraud
12 March 2024

A firm in Wales has been fined almost £20,000 for unwittingly helping to enable a conveyancing fraud.

The Solicitors Regulation Authority said the conduct of Stephens Wilmot Ltd had been neither reckless nor intentional but that its failings had caused ‘substantial’ harm – albeit the money had been returned.

Investigators went into the Pontypool-based practice in 2022 and found the firm had undertaken a conveyancing transaction which was later found to be fraudulent.

The regulator found deficiencies with identification documents supplied by the purported client, noting that no anti-money laundering report had been actioned or proper checks carried out.

The firm paid around £111,000 to an unrelated third party and in doing so was found to have breached public trust and confidence in the solicitors’ profession.

The SRA said Stephens Wilmot ‘had a hand’ in facilitating vendor fraud and should pay between 1.6% and 3.2% of its annual turnover as a penalty. The fine was set at the lower end of this scale given the firm’s early admission, cooperation with the SRA, remedy of the breaches and return of the money.

As well as a financial sanction of £19,383, the firm must also pay £1,350 costs.

In 2021 the SRA opted to rebuke a Bradford firm which had unwittingly acted for a fraudster posing as a homeowner. On that occasion, the regulator said there was low risk of repetition and no pattern of misconduct.

In 2020, the regulator flagged up reports of the return of vendor fraud in conveyancing transactions, where properties were supposedly offered for sale without the consent or knowledge of the owners.

Solicitors were being approached to carry out conveyancing work on behalf of the fake sellers, who often use forged and altered documents or stolen identities. Firms were urged to look out for red flags such as under-value offers being accepted or clients being reluctant or unable to provide documents.

Source: The Law Society Gazette, 12 March 2024

read more articles