A Yorkshire firm who unwittingly acted for a fraudster posing as a homeowner has been rebuked by the SRA.

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

The firm had agreed in June 2018 to act in the sale of a residential property from a person purporting to be the genuine owner. But no-one from the firm met him in person to conduct the enhanced customer due diligence required to verify his identity.

The firm did ask for certified copies of his ID documents and was sent these less than a week later, with a certification by a genuine third party. But the SRA said the client identification process carried out was not compliant with relevant money laundering regulations, and the third party had only certified that the ID documents were true copies of the original documents, without verifying the client’s true identity.

The property was sold in July 2018 and the firm sent the net proceeds to the purported seller the next day. Six weeks later, the Metropolitan Police contacted the firm to confirm it was investigating suspicions that the sale was fraudulent and the firm immediately notified its insurers. The firm did not notify its conduct to the SRA until June 2019.

The SRA said the firm had breached its statutory obligations and failed to carry out adequate due diligence, although it had accepted its failures and taken steps to ensure this will not happen again. The firm has also taken remedial action to mitigate the harm suffered by the buyers and the genuine owner of the property, and there is no evidence of lasting harm to them. The regulator said this was an isolated incident with no pattern of misconduct by the firm. A rebuke was considered appropriate because of the low risk of repetition, but a public sanction necessary to uphold public confidence in the profession. The firm must also pay £600 costs.

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