Estate agencies ‘not taking AML seriously’ says legal senior

A leading law firm warns estate agents that many are still not taking anti-money laundering rules seriously.

Fines totalling more than £1.2 million were handed out to agencies by HMRC, recent figures analysed by London property lawyers Payne Hicks Beach show.

The penalties were imposed during just six months between July and December last year, HMRC has revealed.

Estate agents account for the largest number of fines issued by HMRC since the introduction of AML supervision, accounting for nearly half (45.4%), figures released in January showed.

Data for Q1 of the 2022-23 financial year from verification check provider Credas Technologies revealed that the average AML fine issued to estate agency businesses was an average of £3,815.

No hesitation

Mark Jones, partner at Payne Hicks Beach (main picture), says: “These latest fines, taken together with previous fines issued in the same sector, highlight that there is an ongoing pattern of non-compliance within the estate agent and letting agent sectors.

“Of course, the vast majority in the sector do comply with the rules but a small number of businesses are still failing to comply.

Previous fines and the surrounding publicity have resulted in little improvement, if any.”

He says HMRC will not hesitate to take action against any companies that do not comply with AML regulations.

“Whether or not this will be a wake-up call for the industry remains to be seen, given that previous fines and the surrounding publicity have resulted in little improvement, if any.”

Jones says the property industry has long been considered a target for criminals to launder money.

“The message is clear, that if businesses do not comply with the rules they face significant fines, potential prison sentences (of up to 2 years) and untold reputational damage which may impact their ability to continue trading. The take-away: fail to comply at your peril.”

WARNING: ‘Half of agents don’t take AML compliance seriously’