40% of property firms fined For AML breaches had 'refused help'

Many of the property firms recently fined for anti-money laundering (AML) breaches have previously turned down help, Credas claims.

It was revealed last week that more than 30 agents and property firms such as auction houses and valuers were reprimanded by HMRC for anti-money laundering breaches in 2021.

Anti-money laundering (AML) verification service Credas has now revealed that it had previously been in contact with 12 of the 30 property firms - equating to 40% of the fined businesses in this cohort - but they opted not to proceed with its services.

Credas did not name the businesses concerned. 

It is unclear if the firms used other providers instead.

Tim Barnett, chief executive of Credas Technologies, said: “AML is a responsibility that the property industry has to face whether we like it or not.

“Unfortunately, this burden will only get heavier still as the Government delegates this process to agents and lawyers.

“The fines being regularly levied are becoming significant and those seen here in the latest round of penalties have topped £50,000 yet many have been higher previously, much higher, because they are levied on a percentage of the company’s revenue. 

“Agents simply want to get on with the business of selling and letting houses and so it’s understandable that compliance can sometimes be seen as a side-thought.

“ Yet there are technology solutions like Credas that are easy to implement and cheap to use now and which help avoid vulnerability to big fines and bad PR.

“To think, the cost ‘saving’ that some of the transgressors thought they had made by not spending a small amount on a digital AML process will have been tiny compared to the ultimate fine that has now been imposed upon them.”

More than 30 estate and lettings agents as well commercial property and auction firms feature on the list for the period April to December 2021.

This is out of around 79 firms, making up 44% of AML breaches.

One of the largest fines was for Bond Wolfe Auctions at £52,000 for “failing to apply for registration at the required time.”

Wolfe Auctions blamed a misunderstanding of the reach and scope of anti-money laundering regulations.

Lloyds Property Group, which is registered in Essex but operates in Dorset, was also on the list and received a fine of £15,000 from HMRC for “failures in carrying out risk assessments, having the correct policies controls and procedures, conducting due diligence and timing of verification.”

Estate Agent Today has asked the company for comment.

Witter Properties, a franchisee of the Lovelle brand, was fined £5,000 for failing to register for AML supervision in time.

The company has been asked for comment.

- View the full list of firms.

There is no suggestion that these firms are still not compliant and the list does not reveal if those on the list have since registered.