WARNING: Agents must have robust ‘source of funds’ process

The need for ‘source of funds’ vigilance has never been higher for estate agents.

Protecting transactions from criminal gangs, who are highly skilled at hiding their dirty money, is vital.

‘Source of funds‘ is a term for the original pool of money a transaction originates from. It is important to separate this from the broader ‘source of wealth’, which summarises the various means through which a client accumulates their wealth over time.

DIGITAL COMPLIANCE

I’m deeply entrenched in the digital compliance landscape and I cannot stress enough how vital it is for estate agents to undertake thorough, tech-driven checks. Firms must make it a priority to determine the legitimacy of the funds being handled as part of an anti-money laundering (AML) and digital compliance strategy.

Scrutinising the source of funds is not merely a matter of legality but an unavoidable moral duty for the industry. Compliance with the stringent guidelines set out in the Proceeds of Crime Act is non-negotiable, mandating firms to remain vigilant and report any suspicious activities via a Suspicious Activity Report (SAR) to the National Crime Agency (NCA). The ramifications of non-compliance can be eye-watering, with substantial fines and reputational damage.

The escalating number of SAR submissions should serve as a wake-up call for all agents.”

The escalating number of SAR submissions, expected to surpass one million this year, should serve as a wake-up call for all agents. It dismays me that the complexity of legal frameworks surrounding funds verification can often be a hindrance to firms, creating misunderstandings and lapses of judgement.

I’ve seen a pressing need for the property industry to champion the adoption of digital compliance and make it a cornerstone of their businesses.

RAPID RESPONSE

Harnessing technology not only enables a more streamlined and precise verification processes, but also allows a rapid response to potential criminal activities, fostering a culture of transparency and security within the industry.

But what concerns me significantly is the reluctance to adapt when faced with a rise of financial crimes. I see it as an urgent call for firms to adopt tools that enable swift and efficient checks for source of funds, proof of funds and source of wealth.

Such solutions can integrate seamlessly with existing systems, offering a proactive approach in the fight against money laundering – while building trust and dependability within the property sector.

It is now up to regulated firms to pave the way for a safer, more reliable financial future.

Martin Cheek (main picture) is managing director of SmartSearch