Money Laundering Checks – Why do you ask so many questions?
As a result of a huge volume of property transactions in the UK every day vast sums of money are being transferred and this means the property industry can be a target for money laundering and fraud. Criminals can potentially use property transactions to launder money.
In order to prevent this, there are extensive checks undertaken by solicitors to check the identity of their clients, along with proof of address and evidence of where their funds have come from (source of funds) in the purchase a property to make sure they are not the proceeds of crime.
Your conveyancer will ask for ID documents from you (ideally Passport and Driving Licence) from a list they will supply you and they will verify your identity from these via an online search provider.
You will be asked for a bank statement so that your address can be checked and also bank details if you are having proceeds of a sale sent to you. Evidence of where the funds have come from will be required in a purchase of a property– this will confirm whether the funds are from savings you have accrued, investments, inheritance, a lottery win, proceeds from a sale of a property etc. While this can appear invasive it is essential to prevent money laundering.
If somebody is gifting money towards your purchase (for example towards the deposit) your solicitor will need to ask that person (or people) to sign a declaration confirming they are giving you the money and it is not a loan to be paid back at a later date. It is also necessary to check their identity, address and source of funds.
Solicitors look out for any suspicious activity during the transaction to ensure there are no “red flags” that give them cause for concern about potential money laundering.
Also to prevent the risk of cyber crime you should not send bank details in an e-mail as there is a risk these could be intercepted by criminals.
The checks that we carry out are required by law and are done to protect clients from the risk of fraud and we cannot undertake work on your case until we have the identification documents we need to do our online checks. We know it can seem tiresome to have to produce ID but it is a necessary part of the process to prevent fraud.