Advisers warned against rushing AML checks to beat stamp duty holiday

As the first stage of the stamp duty holiday (SDLT) draws to a near close on June 30 2021, many homebuyers are rushing their mortgage applications in an attempt to make use of the land tax discount.

Anti-money laundering software company SmartSearch warns lenders and advisers about the possible dangers of not dedicating enough time to completing anti-money laundering checks.

Rushed mortgage applications and contracts that have been completed under pressure, could make it easy for criminals and fraudsters to exploit the financial system with property purchases during this housing market boom.

Since the Covid-19 pandemic, there has been an influx of fraud and money laundering attempts in the housing industry. Martin Cheek, managing director at SmartSearch, says: ‘Property transactions remain the number one target for money laundering and with the volume currently going through the system there is a danger that some AML checks and procedures may be rushed through.’

‘But in a way the bigger danger is from agents and legal firms still using 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’s almost impossible for even the most experienced broker or agent to tell the difference. If they’re under time pressure, or just seeing a passport image copied into an email, there is a real danger criminal applications will get through unchecked.’

He adds: ‘Financial services firms who are unwittingly processing applications from criminals will be held responsible by the FCA so it’s clearly in their interest to do everything they can to prevent them even getting through.’

Cheek suggests that businesses in the property market should use electronic verification to tackle the issue and avoid processing criminal applications. Electronic verification is also compliant with Financial Conduct Authority (FCA) regulations, secure, and fast.

Martin concludes: ‘Manually checking hard copy documents is no longer necessary, or secure. The switch to digital is long overdue for many businesses who would not only save themselves time and money, but ensure criminals are kept out of the system.’