Does ID/AML have to be a drama?

The recent thought-provoking ITV drama “Our Home” highlighted the possible nightmare scenario of going away for a few days and coming back to find strangers moving into your house.

A cleverly orchestrated fraud (if a little too simplistic) sees a London home sold fraudulently, demonstrating real challenges that exist in our system if quite simple precautions are not taken.

Had either the estate agent or conveyancer insisted upon electronic Identity and Anti Money Laundering (ID/AML) checks, the scam would have unfolded very quickly, even with the perpetrator being in possession of the real client’s passport, facial recognition would have spotted the imposter immediately.

Whilst the drama may seem far-fetched to many, it does happen – ask the Reverend Mike Hall that was duped in a complex scam that resulted in the loss of his Luton home in November last year.

KYC was originally a banking term “Know Your Customer” but is now more widely accepted to encourage due diligence in our sector.

Ideally, ID/AML checks should be completed once, and then reliable (and standardised) information shared between stakeholders under new “safe harbour standards”. Realistically, however, there is a chance that clients may pay twice or even three times before these are widely accepted.

Estate agents have been required by law to register with HMRC for several years to outline their ID/AML processes and appoint who “carries the can” when it all goes wrong. Some conveyancers still insist on seeing original documents without performing electronic checks, even though fakes are almost impossible to spot when professionally created by a fraudster.

It is also worth considering the new sanctions that have been imposed on members of the Global Community that could prevent an individual being able to engage with a property transaction. Many ID/AML solutions will have an international sanctions and PEP’s check that will help you to avoid breaching these rules and so it is worth including in your standard practices now.

Why take the risk at all? Products and services exist to protect businesses from potentially huge financial penalties, so avoiding the latest solutions makes little or no sense whatsoever.

Daniel Hamilton-Charlton is the Managing Director and Founder of Property Searches Direct

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