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Were both firms equally responsible?

HOC had asked a question for the purpose of satisfying itself that Mr Dawson was entitled to sell the property. The answer that it received could not reasonably have satisfied HOC on that issue and the unsatisfactory nature of the response ought reasonably then to have been reported to the claimant/buyer.

It was the responsibility of AC to carry out risk-based due diligence. The reality is that AC made no serious attempt to do so. They knew that the property was unoccupied, knew that it was not subject to a charge, and knew that Mr Dawson had given an address that was not either the address for the property or the alternative service address that appeared in the proprietorship register for the property. AC made no attempt to obtain an explanation as to why that was so and made no attempt whatsoever to obtain from Mr Dawson any documentation of any sort that established a link between that individual and the property. The reality is that AC simply did not know of the terms of the rules and guidance to which they were subject. Had these enquiries been made as and when they should have been, it is unlikely the fraud would have occurred in the way it did as is demonstrated by the reaction of Mr Dawson to enquiries concerning his employment.

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