OFT fines Leicester-based estate agent almost twelve thousand pounds
The OFT has fined Leicester-based IPS Estate Agents Limited £11,844 for failing to comply with anti-money laundering regulations.
IPS failed to comply with a number of requirements under the Money Laundering Regulations 2007, including those relating to:
- verifying the identity of customers
- keeping appropriate records
- ensuring that relevant staff are aware of the law relating to money laundering and terrorist financing
- establishing and maintaining appropriate, risk-sensitive policies and procedures.
The failures relate to the period between March 2010 and October 2011. The OFT visited IPS premises to check compliance with the Regulations in June 2011 and again in October 2011.
Kate Pitt, OFT Deputy Director of Anti Money Laundering, said:
“This fine sends out a message to all estate agents that they need to have appropriate measures in place to prevent their business from being used for money laundering or terrorist financing purposes.”
The OFT has a role under the Money Laundering Regulations 2007 to supervise the anti-money laundering controls of estate agents and consumer credit financial institutions (CCFIs). The Regulations seek to reduce businesses’ vulnerability to being used for money laundering or terrorist financing by, for example, having to apply risk-sensitive policies and procedures on the verification of customer identity, record keeping, training staff and reporting suspicious activity to the Serious Organised Crime Agency.
The OFT’s decisions to impose fines may be appealed to the First-tier Tribunal (Consumer Credit) within 28 days of the decision being sent.
Estate agents are those businesses engaged in estate agency work as defined by section 1 of the Estate Agents Act 1979 (this includes property finders and property auctioneers) as well as those involved in buying or selling overseas property.
Money laundering is the process by which criminally obtained money or other assets (criminal property) are exchanged for money or assets with no obvious link to their criminal origins. It also covers money, however come by, which is used to fund terrorism.
The Home Office estimates that serious organised crime in the UK generates proceeds of approximately £20 billion a year. Purchasing property in the UK and overseas continues to be a common method used by serious organised criminals to launder the proceeds of criminal activity. The advantage of doing so is that large amounts of criminal funds can be ‘cleaned’ in a single transaction.
For information on suspicious activity, see Estate Agents – Identifying risks to your business and reporting suspicious activity (pdf 120kb).