Agents fined hundreds of thousands but they're not made public, claims NAEA

Estate agents have been hit with six- and seven-figure fines under new anti-money laundering and anti-tax evasion regulations according to the National Association of Estate Agents - but the penalties are not being made public.

In a report released this morning on the business website Business Insider, Mark Hayward - chief executive of the association - claims: "Fines are not publicly being made known but, anecdotally, we know they are significant" and in six or even seven figures. 

He says they are "business busting" and that a "fear factor" is growing amongst agents because of anti-money laundering regulations introduced last year, and aspects of the Criminal Finances Act, which introduced the new criminal offence of failing to prevent tax evasion and additional tools to investigate suspected money laundering and terrorist financing.

The article quotes HMRC as saying that in 2017 there were over 880 penalties issued to different sectors for failing to abide by anti-money laundering rules “including estate agency businesses” - however, it is not saying precisely how many of the 88 went to agents.

Hayward says in the piece that a key problem for the agency industry is its unregulated nature.

"When they [criminals] look to launder money through properties, they look for the weakest link," he says, suggesting that this is likely to be estate agents or property consultants with weaker due diligence procedures or a lack of awareness of the issue. 

These are "relatively easy to find" he says, suggesting they exist in London of course but also in areas with high levels of international purchasing because of overseas students - York and Manchester are specifically identified.

Hayward also predicts that the rise of cryptocurrencies will present new problems for agents expected to guard against money laundering and tax evasion; he also anticipates new legislation will be on its way to tighten agents’ processes further.

You can see the full piece here.