Estate and letting agents are being reminded of their responsibilities when it comes to anti-money laundering (AML) checks.
The compliance warning comes from tenant referencing provider FCC Paragon, which is also warning agents to consider AML checks in the context of new data protection rules.
Introduced in June, the 4th Anti-Money Laundering Directive requires agents to carry out due diligence on both buyers and sellers.
Although it was confirmed in March that letting agents would not be required to carry out mandatory AML checks on tenants and landlords, many still do - particularly those working in London.
Bryn Cole, Managing Director of FCC Paragon, had this to say: "The average agency will now be making more AML checks than ever before and it's vital that they are carrying out the correct procedures and are fully aware of the law.
Agents have been sanctioned over AML failings in the past and the new Directive requires them to do more work and so it’s vital that all firms get up to speed, if they haven’t done so already.”
What’s more, FCC Paragon explains that firms who don't consider their General Data Protection Regulation (GDPR) obligations when making anti-money laundering checks could find themselves in 'big trouble'.
GDPR - which replaces the current Data Protection Act 1998 - comes into force in May next year.
The new legislation will affect the way agents store, process and collect data. Under the new rules, all communications will be required to only include information that the recipient has consented to receive.
Cole adds: "When agents carry out AML checks, they are dealing with extremely personal, sensitive data and it's clear that GDPR regulations leave little margin for error on the part of the agent.
There's now less than 200 days until GDPR is formally introduced and that's why agents need to be planning and strategising continuously between now and May to make sure their processes are efficient, while remaining compliant."
To help ease the burden on agents, FCC Paragon has released a new product called Instant AML.
The cost-effective product will help agents to comply with new legislation and carry out effective AML checks which confirm the identity of buyers and tenants, while mitigating the risk of accepting fraudulent documentation.
FCC Paragon will now use a wider range of corroborative and primary checks, while carrying out checks against Government sanctions, the Politically Exposed Register and the Death Register.
Cole concluded: "We’re hoping this new product can help agents as part of their strategy to comply with GDPR while conducting proper AML checks.
As lettings sector regulation increases and agents are faced with more administration, they will need to take advantage of the right technology and supplier products in order to allow them more time to sell and let property and ultimately grow their businesses while remaining profitable.”