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Ash
Ash, Solicitor
Category: Law
Satisfied Customers: 10916
Experience:  Solicitor with 5+ years experience
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I engaged with a firm of UK lawyers to act on behalf of my

Customer Question

I engaged with a firm of UK lawyers to act on behalf of my company in commercial matters. Whilst doing so I began to run out of funds and needed more money. The opportunity arose for an individual to loan me personally 50k and I asked the firm to draft loan documents on my behalf which they were very happy to do and did so without question. At no point in time (despite the individual loaning me the funds) did they check her identity, question or validate where the funds where coming from or provide any documented advice on these funds. Is this correct? As it happens the funds were from her husband and not her and the documents were drawn up in her name with interest and her reviving a percentage of my company. It has also come to light that this individual has loaned very large sums to other people and should be registered with the FCA? Where does this leave me?
Submitted: 2 years ago.
Category: Law
Expert:  Ash replied 2 years ago.
Hello my name is ***** ***** I will help you with this.
Did you just ask them to draft the loan documents please?
Customer: replied 2 years ago.
They drafted the loan documents and added the terms and the lady's name address and value of the loan and my details etc and the. Sent to me via email for me to print and have signed and witnessed.
Customer: replied 2 years ago.
Alex, should they not have verified the lady and her identity and quantified the funds and were they were coming from? Also is it ethical to act for me on business and personal matters when the firm is such a small firm only 1 owner and the remaing people self employed?
Expert:  Ash replied 2 years ago.
Ok - but did you ask them to do that or just draft the document?
Customer: replied 2 years ago.
No they did that themselves and as I was very naive at this point I did not think anything of it. It is only now looking back that I thought it odd as I have always needed to supply certification of myself and thought that they would require this of others also especially due to the sums of monies involved.
I don't even recall if they ever verified me? I will need to double check this to be sure.
Expert:  Ash replied 2 years ago.
You are the client, the money laundering checks only apply to you. If you asked them to draft the agreement then that is all they are required to do - nothing more. They are doing exactly what you tell them to do. If you asked them for advice on the loan, that is a different matter. However you dont say that, all you say is that you asked them to draft the contract.
Therefore they are only required to do that work nothing more. If you had asked them for advice on the loan, then they may well have had an obligation.
As to being registered with the FCA then if this is a business your loan would still be payable as it is a debt, but no interest would be payable. The debt would still be there but that would be it, nothing more.
Can I clarify anything for you about this today please?
Alex
Customer: replied 2 years ago.
The loan was a personal loan not a business loan and the FCA have advised that the person loanig the funds should be registered with the FCA as she is making sizeable loans to various people without following any of the rules of being a broker and therefor not acting appropriately and misleading the people she is loaning funds to and not also giving the advice that would be legally required in a personal loan environment. This is entirely different to a business loan and I repeat I did not take a business loan. Also the person has used other people's funds to make this document an official document between herself and myself and at no point did the lawyer check, suggest or even highlight any of these situations or potential issues to me.
Expert:  Ash replied 2 years ago.
Thanks. How much was the loan that you want to get written off without paying?

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