What Money Laundering checks do Conveyancers carry out?
Posted on 6th June 2024
Money Laundering is a topic that Chloe, Head of our Conveyancing team and one of our Conveyancing Solicitors in Preston, has to consider on a daily basis. From receiving instructions for the sale of a property, to being instructed for a property purchase, Money Laundering (or the prevention thereof) plays a big part in the world of Conveyancing, and is at the forefront of any good Conveyancing Solicitor’s mind.
In this article, Chloe discusses what Money Laundering is, and how our Conveyancing team deal with protecting our clients against this and fraud during the Conveyancing process.
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What is Money Laundering?
Money laundering is the process in which criminals illegally disguise illegitimate funds as those that have been legitimately acquired. This, in effect, allows them to benefit, and profit, from the proceeds of crime and costs British financial institutions approximately 5 billion pounds each year in tackling the problem.
Our Conveyancing Solicitors in Preston are alert to the warning signs of money laundering and carry out all necessary checks, and due diligence, to ensure our clients are protected from being the subject of such a scam.
As you can see, money laundering is an extremely important issue, particularly when dealing with large amounts of money, and this is why our team undertake such diligent checks.
What Does my Conveyancing Solicitor do?
There are specific protocols and guidelines your conveyancing solicitor is to follow throughout the conveyancing transaction, to ensure there is no fraudulent activity taking place.
MG Legal’s Conveyancing Solicitors have a set policy which is followed in each and every conveyancing transaction we carry out. As examples, these include the following:
At the beginning of all matters, our Conveyancing Solicitors conduct thorough verification of identity checks. Clients are required to provide two forms of identity evidence, one photographic and one which confirms proof of residence. These cannot just be any photographic or proof of residence ID, and they must comply with regulations, being Government issued, or otherwise Government accepted, in accordance with gov.uk.
Our team will see the original document and confirm that the same is a true likeness of the original, and the client, being verified.
If a client cannot attend our office, they must visit another Solicitors’ firm, or the Post Office, to have their ID verified as a true copy of the original and a true likeness of them. Our Conveyancing Solicitors contact the verifier to ensure they met the person, and that the ID was presented to them at the time and place specified.
Once we have ID, we carry out online screening checks to verify the person’s identity, as well as screening for any other issues with could flag for Money-Laundering legislative purposes.
For sale transactions, where the owner does not reside at the property, our team will additionally request evidence linking them to the property such as a council tax bill, or a utility bill, confirming that they do indeed own the property being sold. Alternatively, a rental agreement, or mortgage statement, can be acceptable. Our Conveyancing Solicitors need to satisfy ourselves that the purported seller has the right to sell that property. To protect our valued clients, we will not act further until we are completely satisfied that the person selling the property, has the legal right to do so.
For purchase transactions, our Conveyancing Solicitors have comprised a specific proof of funds form which requires clients to confirm, and provide supporting evidence, as to where funds being used to facilitate the transaction have originated from. This includes extensive checks as to how the client saved the money, or otherwise came about it. This ensures that we have clear evidence that the money is legitimately acquired, and belongs to the person attempting to use it. This is important to ensure that no illegitimate funds are used to facilitate a house purchase.
Our Conveyancing Solicitors in Preston will review the transaction, in terms of anti-money laundering, at regular intervals. This is to ensure that, even if there is no suspicious activity at the start of the transaction, there has been no further reason to believe money laundering may be taking place.
MG Legal, like all SRA-regulated law firms, also have a specialist Money Laundering Regulatory Officer (MLRO), dealing with, and considering issues that arise; although with the stringent checks that our Conveyancing Solicitors have in place, any issues which arise are dealt with early on in the process. The MLRO would be responsible for having any suspicious activity reported to them for their review, before concluding how to proceed, and discussing whether further reporting to the necessary authorities may be necessary.
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Why are Anti-Money Laundering procedures necessary?
With our clients being the priority, and the importance of anti-money laundering checks, this is something that our Conveyancing Solicitors in Preston deem of the utmost importance. These checks are in place against all clients, to ensure that none of our clients fall the victim to fraud or Money-Laundering from a third party.
When dealing with a property purchase, we make sure to raise any relevant enquiries about the identity of the seller, especially if they do not reside in the property being sold, to identify any issues early on in the process, if any exist.
Money-Laundering Regulations can be overwhelming for clients, especially those who have had the fortune of not coming across these types of checks before, as it can seem like our Conveyancing Solicitors are taking quite a personal look at your lives and financial history. However, in doing these checks, we are doing everything we can to comply with legislation, and to protect you from becoming a victim of horrific fraudulent activity.
One legal case that highlighted the issues that can occur is a well-known horror story in the Conveyancing World: Dreamvar v Mishcon De Reya. Dreamvar was a small property company who was buying a house in London from, what transpired to be, a fraudulent seller. The ‘seller’ had obtained the driving licence and TV licence of the actual owner. Mishcon De Reya were acting for Dreamvar, as the buyer’s Conveyancing Solicitors.
The firm who acted for the ‘seller’, Mary Monson Solicitors, were found to have been negligent in their ID checks, and the transaction proceeded with Mishcon paying the purchase funds, of £1.1m, to Mary Monson. The fraud itself was discovered when Mishcon attempted to register the property for their clients, with the Land Registry pointing out issues. At this stage, unfortunately, the ‘seller’ had received the net proceeds, and had disappeared.
The Court ultimately found that the solicitors acting for the seller have a duty to only pay funds to the true owner of the property, who the ‘seller’ in this case was not. In addition, the seller’s solicitor holds themselves out to be acting for the true owner of the property.
In the world of Conveyancing, this shares the risk of fraud in Conveyancing transactions between both parties’ solicitors, even when the solicitors acting for the buyer have, by most standards, not done anything incorrectly.
For clients, this case means that the world of Conveyancing has taken a much stricter approach to ID checks and Anti-Money Laundering than the previous tight checks that firms had. Hence why our Conveyancing Solicitors in Preston will continue, as they did before the landmark case, to carry out such thorough checks against our clients and their funds, ensuring that none of our clients fall victim to a case of fraud.
How can I instruct MG Legal’s Conveyancing Solicitors in Preston?
If you are looking for conveyancing solicitors with your best interests at heart, who will get you moving with minimal fuss, you can contact our Conveyancing Solicitors online, here, or email property@mglegal.co.uk. Our team, headed by Chloe, Solicitor, and Director of the firm, is on hand to discuss Anti-Money Laundering checks, ID Verification, and the importance of Source and Proof of Funds with you, once we have received your formal instructions to act on your behalf with your property matter.
Why choose MG Legal, Conveyancing Solicitors in Preston?
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Fully-Qualified Conveyancing Solicitors
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Decades of Experience
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Tagged as: Conveyancing, Solicitors in Preston
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