Law Society's Campaigns / Mortgage Fraud

Mortgage Fraud Protection for Solicitors

In order to help solicitors protect themselves and their firms from mortgage frauds, the Law Society has been issuing various guidelines and information for solicitors to avoid being criminally liable for fraudulent actions of their clients.

Types of Mortgage Fraud

According to the Law Society, there are two types of mortgage fraud which may harm solicitors:

Opportunistic frauds usually involve giving incorrect information about income with an aim to get a mortgage the clients think they are able to pay but highly unlikely to receive if they would be honest about the height of their income. The other type of mortgage frauds involves organised criminal groups with an aim to make money.

How Solicitors Can Become Victims of Their Fraudulent Clients

According to the Money Laundering Regulations 2007, a solicitor is obliged to verify their clients’ identity and the source of income. If the client is engaged in fraudulent activity and the solicitor fails to prevent them from carrying it out, the lender that suffered loss can claim compensation from the solicitor.

Law Society’s Advice for Solicitors on How to Protect Themselves from Mortgage Frauds

The Law Society is aware that solicitors can’t always prevent their clients from carrying out fraudulent actions and protect themselves and their firms from mortgage frauds and quick house sale companies. However, the Society provides several tips on how to reduce the risk:

What to Do if Suspecting Fraud

The Law Society cautions solicitors against reporting the client to the Serious Organised Crime Agency to get a consent to proceed because the Agency’s consent protects them only from money laundering. Instead, the Law Society recommends solicitors to: