Letting agents have been told they must have the right technology to reduce the risk of fraud.
Olly Thornton-Berry, co-founder of risk management platform Thirdfort, says that agents should not solely rely on manual database checks and require help to reduce fraud risks, as a result of the frenzy over sales and lettings in recent months.
Thornton-Berry says: “Fraud is a huge problem in the UK property market. Impersonation fraud is up 120 per cent. Payment scams are projected to cost £1.5 billion. Money laundering costs the UK economy some £100 billion.”
From October last year, letting agents who deal in rental properties worth more than €10,000 or £8,300 a month must be registered for AML purposes with HM Revenue and Customs.
Thornton-Berry continues: “For property professionals, it’s an enormous amount of work to stay compliant while keeping admin from skyrocketing. But even agents who have grasped the nettle and adopted digital tools can still find themselves unprotected by choosing the wrong tech. Older, legacy platforms are not up to scratch – especially when the pace of house sales is increasing.
“Instead, new developments such as Open Banking, cryptographic and biometric verification, and real-time ongoing PEPs and sanctions monitoring can help property professionals automate compliance requirements, reducing the risk of fraud.
“This technology provides much-needed security for all involved in the conveyancing process, while also improving the client experience. In the current climate, it’s too risky for professionals not to deploy the latest tools at their disposal.”
Last month the compliance team at The Guild of Property Professionals claimed that letting agencies were being targeted by money-launderers.
The Guild was responding to a recent survey that showed almost a third of property professionals believed their own Anti-Money Laundering procedures would not stand up to the scrutiny of HMRC.