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Online agents are more attractive to money laundering criminals, warns HMRC

Lack of face-to-face contact is a key reason why criminals graduate towards internet agents, its latest updated AML guidance says.

Nigel Lewis

HMRC has updated its AML guidance for sales and lettings agents including a warning that online-only operators are at higher risk than traditional high street firms.

It claims that sales and lettings transaction made without face-to-face contact including online, over the phone or via an intermediary reduce an agent’s ability to spot whether money laundering is being attempted.

“This is particularly true when dealing with customers in higher-risk overseas jurisdictions,” the guidance says.

But leading AML software firm Smartsearch says the pandemic means most agents are now operating as de-facto online or hybrid agents and that everyone is now at greater risk.

Link to Money Laundering news“The pandemic forced most transactions to be conducted digitally and for those without a robust anti-money laundering policy in place, that heightens the risk of being exposed to the threat of financial fraud,” says Martin Cheek, its MD.

HMRC also reminds agents that AML awareness is important to prevent funds derived from drug smuggling, people smuggling and modern slavery.

It has also highlighted the long list of key areas that agents should be watching out for when dealing with a vendor, buyer, landlord, tenant or guarantor.

These include:
  • People or companies who don’t fit an agency’s normal client profile.
  • When it’s hard to establish identity.
  • Full or partial settlement in cash, cleared funds or foreign current for no good reason.
  • Being asked to temporarily hold large funds.
  • Clients who turn down services that most clients are keen to use.
  • Clients or counter parties reluctant to reveal source of funds.
  • Unusually high asking prices being requested.
  • Multiple payments through different accounts.
  • Long lets paid in advance using cash.
  • Sudden changes in transaction speed requests.
  • Properties that don’t fit a client’s lifestyle profile.
  • Client reluctant to meet in person.
  • Clients keen to buy or let property without a viewing.
  • Unexplained third parties paying the cost of a transaction without explanation.
  • Groups of people with similar profiles  buying new-builds or off-plan.

Read the updated guidance in full.

Read The Neg’s guide to AML compliance.

October 19, 2020

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