Criminals have targeted nearly one in five property firms in the last year with attempts to launder money or commit other financial offences, new research reveals.

Evidence from SmartSearch showed that 18% have seen a rise in criminals attempting to launder money or commit financial crime through their businesses.

The anti-money laundering (AML) software firm also said 6% had actually been victims of AML or other financial scams in the last six months.

Agents failed to tighten their money laundering checks on new customers despite the sanctions imposed on Russia after the invasion of Ukraine, research from SmartSearch revealed last month.

Up to 70% of agents had not changed their approach to AML requirements for new customers, and there were gaps in the way potential clients were authenticated.

Nearly half (45%) of agents surveyed admitted using hard copy evidence instead of electronic methods. Many were looking at passports or utility bills to identify new clients, even though 14% admitted they were “not confident” in their ability to spot a fake.

Alarm bells

Martin Cheek, Managing Director of SmartSearch, (pictured) said: “These statistics should ring alarm bells for all regulated businesses – especially those which continue to rely on manual checks to onboard new individual customers and businesses.

“We know that organised crime gangs can easily make convincing forgeries of ID documents. Digital solutions remain the most effective way for regulated firms to remain compliant, as well as avoiding the fines and reputational damage which breaches of the regulations can bring,” he added.

“These findings clearly show that investing in robust and ongoing electronic verification is the smartest way to help to prevent those crimes – and to keep regulated firms compliant.”

In the latest survey, 500 regulated businesses in the legal, property and banking and finance sectors were quizzed by SmartSearch.

Other findings:

• Businesses in the East Midlands and Northern Ireland were the most likely to come under increased attacks from financial criminals – where 63 per cent and 71 per cent respectively of firms had seen a rise in illegal activity.
• Other regions were only slightly less vulnerable – up to or more than half of the regulated firms in Wales (56 per cent), Yorkshire (53 per cent) and the West Midlands (50 per cent) also had to deal with increased attempts at money laundering and financial crime.
• Even in areas where firms were apparently least likely to find themselves under increased attack – the North East (33 per cent) and Scotland (37 per cent) – the issue still affected more than a third of those surveyed.
• The size of companies was also a factor in their likelihood of being targeted. Firms of more than 500 employees were almost twice as likely (55 per cent) to see an increase in criminal activity compared to those with less than 50 people (28 per cent).