“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, said Eddie Goldsmith, senior partner at Goldsmith Williams.
“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,” he said.
Goldsmith said advisers should deal with known, proven, professional firms, avoid the cheapest services and be willing to recommend a different solicitor if concerned.
Goldsmith Williams said that fee free remortgaging deals can be hazardous because clients often have no independent legal representation of their own.
Goldsmith said: “It’s too easy to assume that all fraud cases involve a chain of colluding parties, but that is not necessarily the case. It is therefore important that brokers do everything possible to ensure they don’t end-up on the wrong side of the law.”
