Nearly one in three estate agents do not even know if they have an anti-money laundering process in place, and just 16% are confident that they fully understand their legal obligations.
Furthermore, over one in three in a sample of 100 agents have been visited by the AML regulator HMRC, at an average notice of just 3.5 days, but sometimes with just one day’s warning.
The findings emerge from new research by Credas, a supplier of ID and anti-money laundering services to estate agents.
The firm commissioned OnePoll to carry out the research last month.
The results show that although many agents feel confident that they are compliant and have enough knowledge to pass investigation, their business processes say otherwise.
For example,
- Just over half (55%) respondents strongly believed their agency is prepared for a spot-check AML investigation, with 34% somewhat agreeing that their agency is prepared
- Despite this, only 43% of people confirmed that they had an AML officer in their business, while 30% respondents weren’t sure if their agency had an AML process in place
AML investigators will speak to everyone from junior agents up to director level, Credas said it is important that every person in the business knows the AML process and is ready for a spot check.
On their experiences of AML so far, the research shows that:
- 36% of those surveyed said their organisation had been investigated by HMRC in the past, and during the visit, the investigator spoke to a junior estate agent (19%), senior agent (44%), manager (72%) and director (41%).
When asked how much prior warning those who were investigated had from HMRC, the most common period of time was 3-4 days (41%), with 1-2 and 5-6 days following at 16% each.
Only 11% of respondents had more than a week’s notice before an investigation took place.
Credas said that as the average warning time is 3.5 days, this does not give agents much room for preparation or last-minute house clean up.
On HMRC support and the information provided on AML:
- One in five agents did not believe HMRC were providing a sufficient level of support, and when asked what might improve their understanding of AML, and a number of respondents want more training, courses and online guidance from the Government.
- When asked if it would be beneficial to have an additional governing body in place to oversee AML investigations, 29% strongly agreed with the statement, with 48% somewhat agreeing. Just 2% either somewhat or strongly disagreed.
- This is backed up by the fact that just 16% of agents felt that they comprehensively understood the existing money laundering regulations set out by HMRC.
Agents risk fines for breaches of AML. While HMRC will not say how many agents have been fined since it became the regulator three years ago, it does say that it has issued 2,725 penalties adding up to £2.5m for all the seven sectors it regulates.
As EYE reported earlier this week, HMRC doesn’t just fine agents – it now charges an admin fee as well. For breaches of procedure, the fee is up to £350; for compliance breaches, the charge is up to £1,500.
Official advice for agents can be found here:
Comments (11)
Solicitors/conveyancers aren’t “legally qualified” to “get ID from a buyer and seller.” They just take photocopies and use the online tools available, as could any estate agent.
AML/ID checks are not complex situations of legal merit. The agent visits the property and usually meets the owner or owners. They are in a far better position to check ID etc.
You said it Smile: “Estate agents essentially find a buyer for a property and chase up the process” and usually charge 5 times (if not more) than the conveyancer.
The two professions should appreciate what the other does and be working as a team, not as enemies.
I don’t think any agent has an issue with getting ID from a buyer and seller Rob, the issue in my opinion is that the agent is held accountable for carrying out AML checks when we aren’t legally qualified to do so.
But I agree that agents and solicitors should work together, in my experience as a full time sales progressor agents are happy to work with a solicitor to progress a case, sadly many solicitors see agents as an inconvenience or worse and on a daily basis I come across many that point blank refuse to speak to an estate agent on a case, simply because we’re an estate agent.
Solicitors/conveyancers are no more better trained to carry out AML/ID checks than agents. Passing the buck?
Difference is solicitors are regulated and handle VAST sums of client money.
And as they love to remind us time and again they have gone to university etc so are well placed to deal with complex situations of legal merit.
Estate agents essentially find a buyer for a property and chase up the process.
I still believe that it shouldn’t be down to estate agents to carry out these checks, it should only be done by a qualified, legally trained person such as a solicitor. Every agent I have worked for in the past simply gets ID and proof of address for their files, but don’t really understand why they are doing it or what the point of it is as that’s all it is, ID and proof of address.
The crazy thing is that solicitors do it as well!!!!
Exactly, so why is there an obligation on estate agents, who have no legal qualifications, to carry out these checks?
The big flaw is that the NCA and police are not doing much to investigate fraud via property.
So the extremes agents are being pushed to is in large 99% pointless. And as such 100% sad for the effort agents have to put in place.
I know many who have reported bank fraud, and powers that be simply look the other way.
UK is becomming the safe haven financial ciminal safe haven of Europe.
Now there’s a surprise – a scaremongering story from a supplier of AML services to estate agents.
Who is AML??
(Joking)