A firm in Wales finds itself in hot water after being fined nearly £20,000 for inadvertently aiding conveyancing fraud. Stephens Wilmot Ltd, based in Pontypool, was fined by the Solicitors Regulation Authority (SRA) for its involvement in a fraudulent conveyancing transaction.

Unveiling the Misconduct as Stephens Wilmot Ltd Hit with Fine

The SRA, after an investigation in 2022, revealed that the firm had engaged in a conveyancing transaction that turned out to be fraudulent. While the SRA acknowledged that the firm’s conduct was not deliberate, it found significant deficiencies in the identification documents provided by the supposed client. Moreover, the firm failed to carry out proper anti-money laundering checks, leading to substantial harm, although the money involved was eventually returned.

Stephens Wilmot Ltd’s actions breached public trust and confidence in the solicitors’ profession. The firm made a payment of approximately £111,000 to an unrelated third party, which further exacerbated the situation.

Penalties Imposed

In response to the firm’s misconduct, the SRA imposed a financial penalty ranging between 1.6% and 3.2% of the firm’s annual turnover. Despite the seriousness of the matter, the fine was set at the lower end of the scale due to the firm’s early admission of guilt, cooperation with the SRA, remedial actions taken, and the return of the misappropriated funds. Alongside the fine of £19,383, the firm is also required to cover £1,350 in costs.

This incident isn’t an isolated case. In 2021, a Bradford-based firm was rebuked by the SRA for unintentionally representing a fraudster posing as a homeowner. However, in that instance, the risk of recurrence was deemed low, and there was no pattern of misconduct.

Heightened Vigilance Urged

The SRA flagged concerns in 2020 regarding the resurgence of vendor fraud in conveyancing transactions. Fraudsters, posing as property owners, manipulate solicitors into handling fraudulent sales by employing forged or stolen documents. Solicitors were advised to remain vigilant for warning signs such as unusually low offers or reluctance from clients to provide necessary documentation.

Case Offers Stark Reminder for Other Firms

The case of Stephens Wilmot Ltd serves as a reminder of the critical importance of stringent due diligence in conveyancing transactions. Despite efforts to prevent fraud, solicitors must remain vigilant to protect both their clients and the integrity of the legal profession. Completing client due diligence can present difficult challenges given the complexities of attempting to verify an individual’s information and completing those compliantly within the regulatory guidelines.

Verify 365 is uniquely positioned as the best AML technology platform for solicitors facing the increasing scrutiny and potential fines for Anti-Money Laundering non-compliance by the Solicitors Regulation Authority. Verify 365 risk & compliance platform distinguishes itself with its innovative approach to client verification through “Lite” checks, which provide dashboard-based, quick AML verifications, and “Enhanced” Client Due Diligence (CDD). The Enhanced CDD checks include biometric/NFC ID verification, address verifications, politically exposed persons (PEPs) and sanctions and adverse media checks. In addition to providing comprehensive identity checks, Verify 365 is able to complete FCA-regulated Open Banking source of funds checks (4000 banks) along with sophisticated financial analytics. Our dynamic questionnaires enable solicitors and lawyers to conduct exhaustive and compliant AML and client due diligence swiftly and efficiently.

Complete Compliant Client Due Diligence with Verify 365

Having been built within the regulatory framework, Verify 365 ensures compliance and enables your firm to complete global ID biometric checks, recognising over 10,000 identification documents from 195 countries. In addition to this, Verify 365 has other innovative tools that can not only streamline the client onboarding process but enhance other areas of your firm including advanced eSignature technology enabling you to speed up your workflow, reduce the amount of time taken to obtain signed documents and ultimately, send documentation digitally, eradicating a long, withdrawn manual process.

The SRA are determined to ensure legislation is met and any failings will have severe consequences. Firms needs to be alert to any changes but also ensure they are completing effective client due diligence within the regulatory framework. Cases like this always emphasise the fine line between compliance and non-compliance, its essential firms are practicing compliantly so they don’t feel the full force of the SRA who are clamping down on regulation breakers. Verify 365 offers your firm the assurance of compliant practice, transform your client onboarding processes and enhance the overall experience of your clients.

For more information about Verify 365, call us on 0121 274 2312.