Estate agents urged to assess compliance procedures after sloppy AML checks lead to man’s house being stolen

Estate agents are being urged to ensure their compliance procedures are up to scratch after fraudsters stole a man’s identity and then sold his house without his knowledge.

The BBC reported that, after being alerted by his neighbours, Reverend Mike Hall returned to his home in Luton to discover it had been stripped of all his belongings and builders were inside doing work to the property.

Fraudsters had stolen his identity, sold his home and banked the proceeds of the sale. To Rev Hall’s horror, builders introduced him to the new owner of his home, with Land Registry documentation confirming that the deeds had been legally transferred.

John Dobson, CEO of anti-money laundering (AML) platform SmartSearch says this is a shocking yet stark reminder why regulated businesses - especially those involved in the highly vulnerable property sector - should be taking their AML obligations extremely seriously.

He said: “Despite the fact that regulated businesses, like estate agents and solicitors, are legally required to run comprehensive identification, verification and screening on all customers, some are still not taking these obligations seriously, either by not running checks at all, or relying on systems that are not up to the task.

“Many estate agents still rely on manual procedures to check someone’s ID, but fraudulent documents are now so sophisticated that they cannot be identified by manual checks alone.

“The only way to stop this type of thing from happening is to switch to electronic verification - it is the most robust, reliable and secure way to verify someone’s identity.”

Dobson says that verification needs to do three key things - check the ID is genuine, check the person presenting the ID matches it, and once the person has been verified, check they are not associated with any activity that could put the business at risk.

Electronic verification uses multiple sources to check, cross check and validate an individuals’ identity, using the latest biometric and facial recognition technology to ascertain if the person providing the ID and the ID match.

Dobson concludes: “As well as stressing the importance of having good, reliable, electronic checks in place, this case also highlights another key issue - reliance on other professionals.

“In most property sales, there are at least two regulated sectors involved - estate agents and solicitors - and both should have comprehensive AML programmes in place to pick up this type of ID fraud.

“As it happened, none of the professionals in this case were able to identify the seller as a fraudster, which tells us one of two things - either both had shoddy AML procedures, or one did and the other didn’t even run their own checks, relying instead on those run by the other. Either way, it is not good and should act as a wakeup call for all regulated firms that poor AML compliance has serious consequences.”

To find out more about SmartSearch - an all in one AML platform that runs full identification verification and screening on individuals and corporates, with automatic record keeping and ongoing monitoring to ensure full compliance, visit www.smartsearch.com

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