Property market should be on high alert for fraud

John Dobson

March 15, 2021

John Dobson SmartSearch

John Dobson (pictured) is chief executive at SmartSearch

With the positive news around the rollout of the vaccine for coronavirus and a roadmap out of this crisis in place, you’d be forgiven for feeling that we are on our way back to something resembling ‘normal’.

However, it’s more important than ever that brokers, conveyancers and estate agents don’t let their guard down when it comes to identifying potential fraud and money laundering.

In fact, HMRC increased the risk of money laundering through property purchase to high in its recently published risk assessment.

In addition, the Financial Action Task Force (FATF), the global money laundering and terrorist finance watchdog, said recently that the crisis and national lockdowns has introduced new opportunities for criminality in this sector.

Of course it’s well known that the housing market is a prime target for illegal money laundering with an estimated £5bn of properties in the UK having been purchased with ill-gotten gains in the last decade.

This staggering statistic comes from campaign group ‘Transparency International’ and really underlines the scale of the problem.

Understandably, since the coronavirus outbreak began, knowing your customer has become more difficult through traditional ID verification.

Forgeries have reached such a level of sophistication that assessing a physical passport or driving licence is difficult for even an expert. The only way to accurately assess whether a potential customer is legitimate, is by using electronic verification.

This will confirm a person’s identity is genuine, drawing on global databases and online verification tools in a matter of seconds.

It’s a few seconds that could not only prevent criminal activity, but also guard against large fines being imposed for enabling it to happen, albeit unwittingly.

Brokers need to ensure they are not exposed to risk, and the key for this is due diligence, with the emphasis on being diligent.

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