Don’t rush money laundering checks to beat stamp duty holidays – SmartSearch

SmartSearch has warned of the dangers of rushing into anti-money laundering checks, in a bid to pass the next stamp holiday deadline at the end of June.

Thousands of buyers are expected to benefit from the temporary waiver of the Land Stamp Duty Tax (SDLT) on properties valued up to £ 500,000 in England and Northern Ireland, following the decision by extend the holidays from March.

However, as the deadline approaches, there are fears that mortgage applications and contracts will be rushed, giving criminals and fraudsters the opportunity to take advantage of a system under pressure.

Martin Cheek, Managing Director of the West Yorkshire-based company SmartSearch, said there had been an increase in the levels of fraud and attempted money laundering since the coronavirus outbreak, as criminals can easily bypass manual security checks.

He said, “In a busy market like the one we have today, which is driven by the rush to beat the stamp duty holiday, it is a sad fact that criminals and their enablers will seek to exploit the stamp duty. ‘opportunity.

“Real estate transactions remain the number one target for money laundering and with the volume currently going through the system, there is a risk that some AML checks and procedures will be rushed.

“But in a way, the greatest danger comes from agents and law firms that still use manual methods of verification for anti-money laundering processes. Document forgery is a major industry with highly sophisticated products available on the black market.

“It is almost impossible for the most experienced broker or agent to tell the difference. If they’re pressed for time, or if they just see a passport image copied into an email, there is a real danger that criminal claims will go unchecked.

According to Cheek, regulated companies operating in the real estate market should consider switching to electronic verification as a safe, fast and accurate method to onboard new clients and stay compliant with Financial Conduct Authority (FCA) regulations.

He adds, “Financial services companies that unwittingly process criminals’ requests will be held accountable by the FCA, so it’s clearly in their best interests to do everything in their power to prevent them even from going through.

“The most efficient way to do this is to switch to electronic verification for Know Your Customer (KYC) procedures. With the technology available today, it takes two seconds to search individually, across multiple global databases, with just a name, address and date of birth.

“Manual verification of paper documents is no longer necessary or secure. The digital switchover is long overdue for many businesses that would not only save time and money, but keep criminals out of the system. “