Posted on 19 May, 2021Many letting agents are failing to conduct the obligatory identity checks on landlord clients advises a new report out this week.
An article in Lettings Agent Today reveals that whilst sales agents strongly enforce the check, letting agencies are less likely to do so - often not conducting Anti-Money Laundering or Know Your Customer checks.
It is important that lettings agents prioritise completing the KYC checks to ensure the person they are dealing with is who they say they are, and that they genuinely own the property that the agent is going be managing.
Currently AML checks are only required for rental transactions worth more than £8,900 per month. However, there is a liability on agents to carry out basic checks on landlords.
Failure to do so can cause problems - for example, if it transpired a property was being used for criminal activity such as money laundering, agents may be required by the police to provide all the information they hold on the landlord. If they failed to carry out checks on the landlord's identity and history, they could find themselves with a significant legal issue.
Another issue is deceased identity fraud when unscrupulous individuals rent out the property of someone that has recently passed away using their identity.
Letting agents have a duty of care to tenants to ensure the right checks have been carried out on the landlord before they take their funds and move them into the property.
Of course, these kinds of things are never a problem until they become a problem, but it is at this point that they can become a significant problem.
Ultimately KYC is important as the objective is to prevent businesses from being used by criminals for money laundering. Related procedures also enable businesses to better understand their customers which minimises risk.
For information about how Halo, our deceased identity fraud solution can help lettings agents stay KYC compliant please get in touch!