Sloppy AML checks result in man’s house being ‘stolen’

A man from Luton has lost his home as a result of sloppy compliance procedures.

According to a BBC report, Reverend Mike Hall was away from home, and received a call from his neighbours who had spotted strange goings on next door.

When Rev Hall returned home, he found not only that all his belongings had been removed, but that builders had started doing work to the property, telling him they were working for the owner.

When Rev Hall told the builder that there must be some mistake, and that he was the owner, the builder contacted the person he was working for and that individual had documents to prove that he was in fact the new owner of the property, including Land Registry documentation confirming the deeds had been legally transferred over to him.

It was then that Rev Hall realised that someone had stolen his identity and used fraudulent documents and information to sell his home, bank the profits, and disappear, leaving Rev Hall with nothing.

John Dobson, CEO of anti-money laundering (AML) platform SmartSearch says this is a devastating situation, and highlights the very real consequences of not having robust identity and verification checks in place.

He said: “This is a shocking yet stark reminder of why regulated businesses - especially those involved in the highly vulnerable property sector - need to take their AML obligations extremely seriously.

“The fact of the matter is, regulated businesses are legally obliged to run proper identity and verification checks on all their customers to ensure they are who they say they are, and clearly somewhere along the line, this has not been done. Whether the checks were missed entirely, or the procedures in place were not fit for purpose, is almost irrelevant because the result is the same - a man has lost his home because of sloppy due diligence.”

Dobson says while there are a few rogue estate agents and solicitors that don’t bother with checks at all, this is actually quite rare - the main issue is that the procedures many have in place are simply not good enough.

“Regulated firms are legally required to run comprehensive identification, verification and screening on all customers, but many are still relying on manual procedures which are inaccurate and open to human error.”

Dobson says that the only way regulated firms can ensure their customers are who they say they are is to use electronic verification (EV).

“Ultimately, compliance and AML checks need to do three key things - check the ID is genuine, check the person presenting the ID matches it, and check the risk, if any, that they pose.

EV uses multiple sources to check, cross check and validate an individuals’ identity, using the latest biometric and facial recognition technology to ascertain if the person providing the ID and the ID match, offering the most robust, reliable and secure solution.

Dobson points out that this case not only highlights the importance of having robust AML processes in place, but also, that regulated firms should never assume other parties have already run the required checks.

“In this case, at least two regulated businesses would have been involved at some point - an estate agent and a solicitor. Both should be running comprehensive AML programmes, and therefore both should have picked up the ID theft - but neither did, and that is pretty shocking.

“This is a tragic case - and while unusual, should still act as a wakeup call for all regulated firms that if they do not take their AML obligations seriously, the consequences can be severe.”

To find out more about SmartSearch’s all in one AML platform, that runs full identification verification and screening on individuals and corporates, with automatic record keeping and ongoing monitoring to ensure full compliance, speak to one of our AML experts today on 0113 238 7660 or book a free demonstration to see the platform for yourself!