Following a string of recent fraud cases and identity theft by bogus law firms, solicitors acting for purchasers are warned to be vigilant when acting in a conveyancing transaction where they are not familiar with the solicitors acting for a purported seller.
In the recent 2012 cases of Lloyds Bank Plc v Markandan & Uddin and Nationwide Building Society v Davisons Solicitors, the purchasing solicitors fell foul of fraudsters purporting to write from a branch of a genuine firm. Upon completion of the transactions, the completion monies were transferred to the imposters who then disappeared. As a result, the properties were not transferred into the name of the purchasers and the mortgagees were not able to obtain a first legal charge.
In the latter case, the correspondence from the sham branch used the name of a legitimate solicitor who worked for the bona fide firm and was registered with the Solicitors Regulation Authority. In both cases the purchasing solicitors were pursued by the mortgagees for breach of trust. The courts in both instances advised that best practice must be employed where there is any doubt of the validity of a branch or firm and the purchasing solicitors must carry out due diligence on that firm by conducting searches with the Solicitors Regulation Authority, Law Society and ‘entity checkers’ offered by search providers.
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