Thorny issue of pooled client accounts under Westminster scrutiny

Anti-money laundering procedures could be reformed to put an end to the ‘unfair denial of banking services to property agents’ after the issue was raised during a debate on undesignated client accounts in Westminster Hall earlier this week.

Kelly Tollhurst, the Conservative MP for Rochester and Strood, received assurances from HM Treasury that action will be taken to improve guidance and reform anti-money laundering procedures if necessary and end the unfair denial of banking services to property agents.

UNABLE TO TRADE

Tollhurst expressed concern that reputable businesses are at risk of finding themselves unable to trade as a result of their accounts being refused or closed.

She quoted evidence provided by Propertymark saying that Lloyds had threatened one of their members with account closure if they continued to use pooled client accounts, which forced the property agent to open and hold individual client accounts for the rents and deposits of every landlord they worked for, and this particular agent was working with over 100 landlords.

Responding, Andrew Griffith, MP, Economic Secretary to the Treasury, said pooled client accounts were a vital part of consumer protection and that it was wrong to say that PCAs are not eligible for simplified due dilligance, where the risk of money-laundering and terrorist financing is assessed to be low.

IMPORTANT ISSUE

Timothy Douglas, Head of Policy and Campaigns at Propertymark, says: “A big thank you to Kelly Tolhurst MP for tabling this debate and helping to shine a light on the important issue of banks closing and not allowing undesignated or pooled client accounts.

“This is an issue that impacts all industries and in particular property agents as was highlighted in the debate. It was pleasing to hear the Minister acknowledge the severity of the issue and he will work to ensure that there is better guidance, better clarity and amend regulations where necessary.

Earlier this year the agent trade body wrote to  Chancellor Jeremy Hunt highlighting the ongoing issues and pushing for action from the UK Government to find solutions that reduce barriers for letting agents to operate.