Property developers report increases in Suspicious Activity Reports

The flow of dirty money into property development firms is said to be increasing, with more than a third (40%) reporting a rise in the number of Suspicious Activity Reports (SARs) they have submitted over the past six months, new data shows.

The “concerning” figures are revealed in a comprehensive new survey of compliance decision-makers in property developers, gambling firms, crypto platforms and high-street and challenger banks, by SmartSearch.

However, despite being targeted by criminals, many property developers also admit to continuing to rely on flawed manual checks to verify customers. Nearly half (46%) said they verified new individual and business clients manually – wrongly believing that taking copies of official documents like passports or driving licences provided “reassurance” that customers were genuine.

The proceeds of Crime Act requires regulated firms to submit a SAR to the National Crime Agency (NCA) if they believe that someone is trying to clean dirty money earned from the proceeds of crime. The number of SARs submitted has doubled in the last five years and the NCA has estimated that it will hit a million for the first time this year.

Corruption campaigning group Transparency International UK has estimated that £6.7bn of suspicious funds has been invested in UK property since 2016.

SmartSearch managing director Martin Cheek said:

“These figures are concerning because they show that there is no abatement in criminal attempts to wash dirty money through the UK economy. Far from it – suspicious activity is clearly increasing.

But that concern is compounded by the number of firms who also admit to a continued reliance on manual checks to onboard new customers. If these firms are seeing a rise in suspicious activity, then their customer verification and anti-money laundering procedures should be as robust as possible. But our survey shows that they are not.”