SmartSearch has warned against the dangers of rushing through anti-money laundering checks, in an attempt to beat the upcoming stamp duty holiday deadline at the end of June.
As the deadline gets ever closer, SmartSearch has concerns that mortgage applications and contracts may be rushed through, providing opportunities for criminals and fraudsters to take advantage of a system under pressure.
Martin Cheek (pictured), managing director at the West Yorkshire-based firm, said there had been increasing levels of fraud and money laundering attempts since the outbreak of coronavirus, as criminals can easily bypass manual security checks.
He said: “In a busy market as we have today, which is driven by the rush to beat the stamp duty holiday, it’s a sad fact that criminals and their enabling agents, will look to exploit the opportunity.
“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.”
According to Cheek, regulated businesses operating in the property market should be looking to switch to electronic verification as a secure, fast and accurate method of onboarding new customers and remaining compliant with Financial Conduct Authority (FCA) regulations.
He added: “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.
“The most effective way of doing that is by switching to electronic verification for Know Your Customer (KYC) procedures. With the technology available today it takes two seconds to carry out an individual search, across multiple global data bases, with just a name, address and date of birth.
“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.”
