Money Laundering? Quite a Bit in The Estate Agency Sector

Always good to know the latest trends in money laundering if you work in insurance fraud teams. Here’s some useful data from Credas;

Sector data analysis and insight by Credas Technologies, the leading identity verification checks provider, reveals that while overall anti-money laundering fines have declined by almost -19% in the past year, the sum of fines being issued to estate agents has increased by 980%, totalling £772,618 in 2021/22.

The UK Government has made it a legal obligation for the business sectors defined by the Money Laundering Regulations – such as estate agents, accountants, financial service businesses, and solicitors – to register for anti-money laundering (AML) supervision from HMRC, officially known as Economic Crime Supervision.

If a business covered by these regulations is deemed to have insufficient AML practices, monitoring, and precautions in place, HMRC is able to issue significant fines.

The latest analysis of the data by Credas Technologies shows that the total sum of fines in the UK has fallen by -18.8% annually, down from £3 million in 2020/21 to £2.5 million in 2021/22.

Despite this overall drop, two particular industries have seen enormous increases in fines: Accountancy Service Providers have seen fines increase by 1,083% in the past year, while fines for Estate Agency Businesses have gone up by 980%, reaching £772,618 in the last year.

However, not only are these sectors some of the most vulnerable and high risk industries, but previous analysis by Credas Technologies found that the estate agency leads the way when it comes to new AML registrations and the sector accounts for a sizable proportion of all AML registered businesses. As a result, a higher level of fines issued is only to be expected given the sectors greater acceptance of AML compliance.

What’s more, the total sum of fines issued to estate agency businesses since the start of the pandemic (2020 to 2022) is actually 41% lower than the total sum of fines issued in the two years prior (2018 to 2019).

In the two years prior to the pandemic, the sector paid a total of £8.215m, but in the last two years, this has fallen to just over £4m.

The only industry to have seen the total sum of fines increase during the pandemic is accountancy, up by 483%.

Tim Barnett, CEO of Credas Technologies says:

“At a glance, it may seem as though estate agency is very much the bad egg of AML compliance, with a huge annual increase in fines issued, surpassed only by accountancy service providers. However, this is perhaps a little unfair and there are a few factors that are important to consider here.

First of all, the property industry was not only locked down for a period of time due to Covid protocols, it then experienced an unprecedented period of boom which is yet to show any signs of slowing. With many firms also fighting tooth and nail to adapt to a changing landscape, there was always likely to be a period of adjustment and, when coupled with a far higher rate of output, an increase in AML compliance slip ups.

Secondly, estate agency has been leading the charge when it comes to the number of new businesses registering for AML compliance and so this will naturally lead to a greater level of fines when compared to other sectors.

Finally, when you compare the level of fines issued since the start of the pandemic versus the two years prior, the estate agency sector has actually seen a 41% reduction. So while there may have been an annual spike as the industry has sprung back to life, the estate agency sector has actually seen a reduction in AML fines issued during the pandemic as a whole.”

Data tables

Data tables and sources can be viewed online, here.

About alastair walker 11433 Articles
20 years experience as a journalist and magazine editor. I'm your contact for press releases, events, news and commercial opportunities at Insurance-Edge.Net

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