Estate agents throughout the UK are being warned today to improve their compliance with anti-money laundering regulations – or risk enforcement action.
The warning comes from the OFT which says that out of an estimated 10,000 agents that should have signed up to the compulsory money laundering register, only 6,600 have done so.
It has just announced the results of two separate pilot programmes, designed to identify and address compliance and registration issues across the UK.
The first targeted estate agents in England, Wales and Scotland, and focused on registration. The second concentrated on the compliance of estate agents in Northern Ireland.
The review in England, Wales and Scotland uncovered 213 unregistered estate agents.
After the OFT made contact, 212 registered and a penalty of £2,000 was imposed on one for failure to register. The agent has now registered.
The Northern Ireland compliance pilot was undertaken jointly with Trading Standards. It revealed low levels of estate agent compliance, including problems with verifying customer identity.
All but one of the 22 Northern Ireland estate agents visited required extensive advice on how to comply. The OFT will also contact trade associations to further improve members’ compliance.
Altogether, the OFT’s anti-money laundering team has now answered over 6,500 business inquiries on how to comply and continues to provide guidance.
Mario Tsavellas, OFT director of Anti-Money Laundering, said: “Raising awareness and improving compliance with money laundering regulations plays an important part in the Government’s aim of deterring and disrupting financial crime and the funding of terrorism.
“The OFT is committed to supporting businesses through education, advice and guidance. However, where necessary, we will use our powers to impose penalties or prosecute non-compliant businesses.”
Henry Pryor, the estate agency commentator, said: “It seems unlikely that whatever you might think of estate agents, they could be caught up in the war on terror, but nevertheless, it is embarrassing to see a Government agency fail to enforce legislation of this seriousness: it looks like something out of the Keystone Cops.
“Estate agents very rarely hold client money – the lawyers do. Letting agents certainly do but they are not ‘estate agents’ as defined by the 1979 Estate Agents Act.
“Despite charging agents £74 per premises to register, the OFT has only managed to record 65% of all estate agents. This worthless register costs over £800,000 to set up and continues to cost over £150,000 a year to run. Nearly four years after it became law the register is still missing 35% of firms.
“The Government sensibly plans to disband the OFT but it is suggested that they will pass its property responsibilities to Trading Standards. Their record on policing estate agency would embarrass an Eastern European dictator!
“If the consumer is going to have to rely on the over-worked trading standards officers to deal with rogue estate agents, then we can expect hours of future Panorama programmes on the subject.”
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Comments
In fairness Anna - HP may have a sauce, but Twitter is not HIS blog - its your own where you tag others using @ - and one of the tags was this sites Twitter name.
Henry Prior – how rude and conceited! Continue the story on your blog, why? when we have logged onto EA Today not you or likely too! Big head arrogant plus lots more, all spring to mind.
amy@paliltd...: OF COURSE those measures won't stop ML taking place.
But, if it is ALL the requirements that the Government place upon EAs, then why do you expect them to go that extra mile...? (at extra cost to boot)
According to our elected leaders (...the LAST ones, to be factually correct...), that IS the "proper AML procedure..."
This righteous indignation is all very well, guys, but the fact is it's the law. It might be stupid, pointless and a rip-off. But no supposedly serious, honest, professional etc etc etc estate agent should condone flouting the law. Ater all, imagine what it would do to our lovingly nurtured professional image if word got out...
I agree with 'Watching'. I ask for a id and number, then get a signature on instruction. We dont bother asking id from buyers.
Ultimately, solicitors do the same job again anyway, and properly.
We paid our money laundering subscription in cash from the suitcase of £50 notes our buyers bring in all the time. Not sure what all the fuss is about.
I have my cheuqe stub for £75. I have had NOTHING from them in years. I dont blame anyone for poking two fingers up at this one. An OFT cash cow, nothing more.
Producing a passport and bank statement won't do the job for the reasons pointed out below. There is a proper AML procedure which is cheap, easy and can be done in thirty seconds from your desk top or lap top.
Residential Sales EA's cannot prevent money laundering, solicitors can, accountants can, banks can, but EA's cannot.
We advertise propert for sale (we can check vendor ID's, but it proves what exactly?), buyer makes offer, seller accepts. (we can check buyers ID, again, proving what?)
We then hand the process over to solicitors, who make checks again !!
People who clever enough to have obtained enough money to wish to launder it are not stupid enough to bowl into an estate agents office with £500k cash and expect a title deed to be passed to them there and then.
It's stupid legislation. Our government launders money daily, our money in their tumble dryer (turmoil dryer)
This is not about money laundering! It is about tax evasion and the cost reduction to the revenue agency in obtaining information. Imagine you go for a job interview. The employer syas "You MUST work for me, you have no choice. You must pay me £74 pounds and I will pay you absolutely nothing. You will have an administration role. If you screw up, you will be fined a great deal of money" Do you take the job? Or do you do what 35% of Agents have done, and not turn up for the interview in the first place. I commend your common sense.
the bit that infuriates me is that we get roped in to the money laundering against our will and then get promptly charged a fee each year to belong! Might not be a lot but it is a mickey take that we have to pay to help when we are forced to help.
The problem with the whole thing is that it is all so pointless.
Consider:
Bad person wants to money launder.
Buys cheap fake passport (£500 gets you a REAL one with your photo in it but someone else's details).
Photoshop a bank statement.
That is enough to get by me no matter how diligent I am.
BTW price for passport comes from a discussion I had with a member of SFO.
The problem with the outstanding 34% of agents is they think like me - why bother - it is a waste of time.
Personally, we registered because someone sent me a reminder, the cost wasn't massive and I just thought that the effort required to NOT pay and have to deal with the consequences would be so great I might as well.
Once again those agents who play by the rules end up spending money unnecessarily and those that flout the law escape with a slap in the wrist.
Continue the debate on Twitter @HenryPryor and @EAT