Eddie Goldsmith, senior partner at Goldsmith Williams, said: “Unfortunately, in many instances, solicitors do not know that client applications are being made fraudulently and brokers are at risk of finding themselves in exactly the same situation.
“It is therefore critically important that brokers not only carry out ‘client due diligence‘ as required by the FSA, but also carry out due diligence on the legal partners they work with.
“The very best way to ensure legal partners are sound is to only deal with known, proven and professional firms. Brokers should give preference to trusted rather than the cheapest conveyancing firms and, if in any doubt, should be prepared to recommend their client consider a different firm of solicitors or conveyancers.”
Goldsmith Williams claimed fee free remortgaging deals can also be a problem, because clients often have no independent legal representation of their own.
Goldsmith added: “It’s easy to assume that all fraud cases involve a chain of colluding parties, but that is not necessarily the case. Some will involve solicitors and mortgage brokers who have no idea their client is acting with criminal intent.
“It is therefore important that brokers do everything possible to ensure they don’t end-up on the wrong side of the law.”
