Hands up who loves AMLs and compliance?!
Any takers?
No I didn’t think so! AMLs and compliance are hardly the most exciting part of the property industry. And yet if you get it wrong it can really hurt you, both financially and professionally.
So why are so many agents in the industry taking the risk and not doing it properly? I think the answer lies in the old phrase “people don’t like change”
The property industry is one where change is rarely seen as a positive, the mindset of “this is how we’ve always done it” is rife. And to change the mindset of someone who has been doing things the same way for a long time is very hard. A study from the European Journal of Social Psychology found it takes on average 66 days for something to become a habit. Over two months for a mindset to change, and something to become the ‘norm’
But the risks are huge if you get it wrong with your compliance. HMRC is coming down harder those in the property industry for non compliance, not only naming and shaming them but landing some pretty hefty fines on them too!
The biggest single branch fine HMRC have issued is £92,000.
An agent got an on the spot fine of £8000 for not having a business risk assessment or compliance policy.
There is a huge reliance on technology within the AML space, and the hope is that the technology will be enough to get you through. And don’t get me wrong, technology is a big part of getting the initial ID checks done. But it cannot do the whole job for you. It takes people to chase down documents, to collect additional information when needed for enhanced due diligence, and it can take a lot of time.
The number of agents taking the risk and simply hoping that HMRC won’t come to see them and audit their files is terrifying! There is help and support out there to ensure you are remaining compliant. Don’t leave it as a job for next week, because with a fine of £92,000 will there be a next week?
If you take anything away from this article, please let it be that you take a look at your compliance processes. Identify where you are potentially falling short. Take steps to ensure you are protecting yourselves and your business from the potential of a hefty fine. Because no one wants to be the agent named by HMRC and fined out of business for the sake of not checking your processes.
Protect what you have worked so hard to build.
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