Conveyancing firm censured over poor identity checks that led to property fraud

The Solicitors Regulation Authority (SRA) has censured a Yorkshire conveyancing firm whose lack of proper checks on a prospective seller helped facilitate a property fraud.

Bradford-based Schofield Sweeney has admitted that it failed to carry out proper checks on the prospective seller before the transaction took place.

In its published Agreement on the case, the trade body says Schofield Sweeney had begun acting for the fraudster in June 2018 when he was purporting to be the owner of a residential property.

But the team handling the sale did not meet him in person to complete the enhanced customer due diligence required to verify his identity.

Also, Schofield Sweeney did not ask for certified copies of his ID documents and instead outsourced it to a third-party supplier, helping facilitate the property fraud.

Fake vendor

The property was sold a month later and the proceeds wired to the fake vendor. Police later contacted the conveyancing firm to say that the sale was likely to be fraudulent.

The SRA says the conveyancing firm had, by failing to perform adequate customer due diligence as required under the relevant money laundering regulations, contravened several of the SRA’s principles.

It was also censured for taking a year to inform the SRA about the fraud.

Given these points, the trade body says a public rebuke is appropriate and has told the firm to pay costs of £600.

In mitigation, Schofield Sweeney says it was an isolated incident, that it has admitted its failures and also taken ‘remedial action’ to mitigate the harm caused to the property’s real owner and the buyer.

Read more about property frauds.