To take a deeper look into the most frequent conveyancing risks, we produced several articles throughout 2021:
- Ground Stability
- Flood
- Planning
- Coal
- Energy & Infrastructure
Here is a quick run-through of the points of each article and some quick links to their accompanying resources.
Subsidence is thought to affect up to 20% of residential properties in England and Wales. This is costly to the insurance industry with over 10,000 homeowners making claims worth £64 million.
It can be a fundamental problem, caused by:
- the addition or removal of vegetation
- changes in the water table
- mining activity
To find out if there is a risk of subsidence on a property, it is best to order an environmental report which specifically addresses subsidence issues.
This report should provide information on the risk of all forms of subsidence, infilled land, mining and subsidence claim data. RiskView Residential is one such report and can be ordered easily as part of a standard pack.
If subsidence is identified, it is then best to seek advice from a RICS Charter Surveyor to conduct a building survey.
This article was written by Mark Taylor, Channel Manager at Landmark Information and environmental auditor with the Institute of Environmental Management and Assessment. He advises that “over 5 million properties are at risk” from flooding and considers whether this is an issue taken seriously by the conveyancing industry, the government and the homebuyer.
He asks:
- Are we doing enough to protect ourselves and our assets?
- Are we taking risk seriously enough?
- Are we doing enough to protect ourselves from risk where it exists?
- What is within the conveyancer’s control?
As we move forward, should the conveyancer be exploring flood risk as standard? The Landmark flood reports offer a manual review of data by a consultant where an elevated risk may exist, at no extra cost. This is within both the Landmark Flood report and the market-leading All-in-One environmental report, RiskView Residential.
As this article says, change is inevitable. The housing market is going through a period of major change. The government is making headway with updates into what it sees as out of date and complex planning laws. In addition, the government has set itself ambitious targets for building new houses.
This push for urbanisation will affect existing properties in currently rural areas. New towns and some of the larger estates planned will also require additional amenities. All these factors will need to be considered by a potential buyer.
The Landmark Planning report, as well as Landmark’s all-in-one environmental due-diligence report, RiskView Residential uses a unique dataset based on polygons as well as point data to provide the most comprehensive insights into planning data and provides the fullest picture of a property to clients.
Although economic and political influences mean coal mining has now virtually ceased in the UK, old and disused mines and their legacies can still affect a property:
- Subsidence
- Sinkholes
- Opencast mining
- Mine entries (shafts and adits)
This article gives a clear overview of the types of risk that come from coal mining, and looks at several reports that you can obtain through Landmark that all include:
- Easy to digest information on the nature of any risk
- Accurate reporting of risks, even in areas known by The Coal Authority to be problematic
- Technical queries handled by industry professionals and experts
- Thorough industry knowledge of mining information, its complexities and limitations
- Includes a Professional Opinion on the next steps on identified issues
The final article in the risk series focuses on large scale infrastructure projects. The UK Government is planning significant expenditure into infrastructure and the creation of a new National Infrastructure Bank.
This article looks at:
- The rebirth of infrastructure
- Infrastructure and Property
- Green Investment
- Our value of space
- What is being reported and is it reasonable?
Both Landmark’s Energy and Infrastructure report and their market-leading All-in-One environmental report, RiskView Residential provide the information to this, searching to a shorter radius in urban centres so as not to identify an unlikely issue.
We hope you have found this series informative. To find out how to include Risk products in your bundle, please call our Service Introduction Team on 01782 433 270 or email intro@onesearchdirect.co.uk.
AML risks a top priority for the SRA into 2022 and conveyancers need to remain vigilant
We’ve seen caseload volumes return to more normal levels since the SDLT holiday ended. In a way, the industry is returning to some kind of normalcy. So, it’s a good time to ask:
Are AML criminals returning to “normal” as well?
The Financial Conduct Authority (FCA) highlighted in its 2020/21 report published in September:
“For some, the pandemic meant diverting resources away from AML supervisory activity, which inevitably affected the number of assessments they conducted.”
Now is a good time to refocus on AML and check your policies, procedures and training schedule is in order.
Conveyancers need to stay one step ahead of AML criminals
The UK is seen as a high-risk jurisdiction for money laundering. Conveyancing has been designated high risk because of the amounts of money that are moved.
To help tackle complacency, HMRC published a name-and-shame list of businesses that have not complied with the regulations, which includes a number of law firms and estate agencies.
The SRA is also adopting a tough stance with individuals banned from holding compliance roles, and firms issued with heavy fines.
In the 2020/21 AML Annual Report, the SRA stated the main cause of breaches were:
- Inadequate policies, controls and procedures
- Lack of supervision or training
- Staff not following set procedures
In addition, 273 reports of potential AML breaches were made, which most commonly involved no AML risk assessment.
Or failure to carry out:
- Source of funds check
- Customer due diligence
- Identity checks
Although complying with AML regulations can appear daunting, there are solutions available to help conveyancers of every size and budget.
The SRA highlighted major red flags all conveyancers should be monitoring
The SRA’s report states:
“The two areas where we continue to see the most risks relating to money laundering are conveyancing, including vendor fraud (where fraudsters try and sell a property without the consent or knowledge of the owner) and dubious investment schemes.”
The subsequent press release highlighted house sale fraud as one avenue criminals continue to pursue.
The SRA stresses the importance of conveyancer vigilance and lists the following red flags:
- the property price is significantly over or under the market value
- the seller or buyer is reluctant or unable to provide documents
- ID documents do not look genuine
- there is pressure to complete the transaction very quickly
- minimal work is instructed, for example, no searches are requested
- there are complex or unusual circumstances around the transaction
- it is a cash purchase of a property
- funds are coming from or going to unconnected third parties
Conducting these checks manually is time-consuming and prone to error. Ensuring the data you work from are up to date is a huge challenge for a busy conveyancer.
Electronic verification is helping conveyancers to stay compliant – efficiently
The SRA says, “electronic verification tools can help firms carry out these tasks, but it is important that firms use them appropriately.”
The Legal Sector Affinity Group (LSAG) agrees, acknowledging “In an increasingly digital age, it is clear that non-face-to-face customer onboarding can no longer be viewed as always high risk (although it remains a key risk factor to be assessed in the context of the wider relationship) – a more nuanced approach should therefore be adopted to these types of relationships.”
The LSAG goes on to say the use of electronic identification and verification (EID&V) tools may be helpful in that they:
- can improve efficiency in customer identification and verification at on-boarding
- allow the undertaking of checks that may be resource-intensive to be done more efficiently
- can be applied consistently from client to client
- can support ongoing due diligence and scrutiny of transactions
OneSearch’s AML offerings can help keep you compliant
We offer a number of Customer Due Diligence (CDD) checks to support your Know Your Customer (KYC) procedures.
GBG AML (Anti-Money Laundering) Check
This comprehensive report includes:
- UK Deceased Persons Database
- UK NCOA (Alert Flag) Database check
- International Sanctions (Enhanced) check
- International PEP (Enhanced)
This is a powerful combination of the GBG AML Check with a document check to ensure all your bases are covered when verifying the identity of your clients.
- This report on individuals returns seven proofs of identity from six independent sources, including Experian
- Equifax
- Dow Jones
- Companies House
In addition, the Dual CRA Bureau connectivity enables the highest ‘match & pass’ rate in the market.
You can simply add what you need to your order on a case-by-case basis.
Or, to ensure consistency across all cases and branches, set up your existing search bundles with the addition of an AML check.
1 in 4 of the top 500 law firms use the service we recommend and have made available on our ordering platform. To find out more about adding Anti-Money Laundering products to your bundles, call our Service Introduction Team on 01782 433 270 or email intro@onesearchdirect.co.uk.
Are constant Lender Handbook Part II changes leaving conveyancers vulnerable against PI claims?
An easy to use defence against unpredictable Lender Handbook changes
Lenders change their Part II policies as often as they deem necessary. Staying on top of these changes doesn’t have to present difficulties for solicitors.
The importance of checking Lender Handbook requirements cannot be overstated, as not doing so can result in a failure to pass an externally commissioned lender audit. Such failures leave law firms open to:
- insurance claims
- removal from a panel
- potential action from the SRA
- additional reputational damage that no price can be put on
Having access to essential lender requirement changes before submitting the certificate of title (CoT) is key to protecting your law firm against costly suits, or a heavy blow to your reputation.
The volume and frequency of changes mean it’s easy to miss key updates. Out of 250 lenders:
- 75 lenders updated their requirements in 2020
- 62 lenders have updated in 2021 so far
- There have been 130 updated questions in the last 30 days
Part II Handbook requirements should always be checked for changes before submission of your CoT. You can now do this easily, efficiently and with complete peace of mind with the LC-5 Lender Check.
Safeguard your law firm with an easy to use, accurate report on any UK Finance listed lender
To help mitigate the risks of non-compliance, OneSearch Direct is making the LC-5 Lender Check from Navro available to all customers. This report clearly highlights any changes in the Lender’s Handbook Part II requirements for the relevant lenders within a specified date range.
You are immediately shown a comparison between the previous and new wording in summary and then in detail. Pinpoint the information you require. Double-check as part of your due diligence easily and efficiently.
You will also be advised if there have been no changes. So, should you be audited, you have a simple, visual record of your compliance. With the LC-5 Lender Check, UK Finance Part II requirements are interrogated 4 times a day.
- Old and new answers are shown in summary for instant comparison
- Easy to use – simply complete the relevant details
- Update your report at the click of a button
Not only is it clear to interpret and easy to order, but you can also rely on the accuracy of the results:
- Refresh your LC-5 up to 5 times per case
- 24/7 updates available
- Available for any lender listed by UK Finance
- Keep in case file for auditing purposes
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The LC-5 Lender Check means peace of mind, convenience and accuracy. Because it was developed by conveyancers for conveyancers, the LC-5 report ticks all the boxes and gives you the confidence to know you’re adhering to the most up to date changes.
Not only that, but you can standardise best practice procedures for intra and cross-branch compliance.
For a limited time only, we are offering one free LC-5 Lender Check to conveyancers. Simply tell us the name of the lender you would like to check (they must be a UK Finance listed lender), and we will send you a report of any changes within the last 7 days. Click here to claim yours now.
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For more information, please email intro@onesearchdirect.co.uk or call 01782 433270.
The SRA promises strong action against firms who fail to comply with AML obligations
The Solicitors Regulation Authority (SRA) has published its Risk Outlook for 2020/21 with a segment dedicated to the ever-growing concern of Anti-money laundering. At OneSearch, we know solicitors are busy at the best of times, and certainly now, so we have provided a summary of the key takeaways for you.
SRA gives special mention to vendor fraud
The SRA is sympathetic to the difficult circumstances law firms are dealing with, but stress this will not be considered should they be found to be non-compliant.
In the Risk Outlook, the SRA asks that law firms are especially alert to suspicious vendor behaviour due to a worrying trend of increased vendor fraud. They list eight red flags:
- the property price is significantly over or under the market value
- the seller or buyer is reluctant or unable to provide documents
- ID documents do not look genuine
- there is pressure to complete the transaction very quickly
- minimal work is instructed, for example, no searches are requested
- there are complex or unusual circumstances around the transaction
- it is a cash purchase of a property
- funds are coming from or going to unconnected third parties
How to manage AML risk and comply with current and future regulations
Whilst the SRA acknowledges that law firms are suffering from issues such as staff shortages, a tight SDLT deadline, and ongoing business adjustments related to the covid-19 pandemic response, it firmly reminds all law firms that not carrying out the appropriate money laundering controls is an offence they take very seriously.
The following requirements and processes are reiterated:
- Have a written and compliant firm-wide risk assessment
- Maintain policies, procedures and controls to prevent money laundering
- Train relevant staff
- Ensure SRA approval for relevant positions (beneficial owners, officers and managers)
- Obtain an independent audit (where relevant as a result of the size and nature of your firm)
- Ensure ongoing monitoring of all transactions
- Carry out customer due diligence (CDD) and enhanced due diligence (EDD) checks where needed
- Complete Suspicious Activity Reports (SAR) where necessary
The SRA lists additional recommendations from the Legal Services Affinity Group (LSAG) for firms to monitor:
- being asked to work with unusual types of consumers or to do work that is different to your firm’s normal area of experience or expertise
- being pressured to avoid CDD checks or to ’speed up’ the process
- any attempt to make deposits into your client account where no legal services are provided
- transactions where the business rationale is not clear
Solutions for AML compliance
The SRA offers the following guidance on how to manage your CDD under the current circumstances:
“Many firms will have found CDD, including appropriate levels of identification and verification, more difficult because of lockdowns and social distancing. Electronic verification tools can help firms carry out these tasks, but it is important that firms use them appropriately.”
The use of electronic checks is further supported by the LSAG, who propose that law firms consider using electronic tools to help inform CDD decision making.
At OneSearch, we’ve also found electronic checks to be beneficial to law firms conducting CDD. In fact, 1 in 4 of the top 500 law firms use the service we recommend and have made available on our ordering platform.
SmartSearch is a quick but accurate and vital way for law firms to carry out their due diligence. Created with the highest quality data, the SmartSearch Individual AML Search addresses all KYC, AML, Sanction & PEP compliance needs with global coverage and with ith no need to collect documents.
In addition, all searches return seven proofs of identity from six independent sources, including Experian, Equifax, Dow Jones and Companies House, giving you the best reassurance possible that you are complying with your CDD obligations.
Please click here to download a sample.
If you would like to read more about this product, please click here.
To add this product to your existing search bundles and solidify your AML process, please contact your Regional Manager, or call us on 01782 433270 and we’ll be happy to assist you.
What is the latest on Anti Money Laundering risks?
Given the enormous changes we’ve all had to adapt to since March, focus on Anti Money Laundering (AML) risk may have taken a back seat. However, there is an increasing body of evidence which suggests cyber criminals are taking advantage of these shifts in working patterns and online behaviour.
The property industry is the ideal place for such criminals to clean their dirty money, so it comes as no surprise that more robust procedures are more important than ever, underscored in a May report from the Financial Action Task Force (FATF). The report highlights how changing financial behaviours are creating a gateway for potential fraud:
- Increased remote transactions
- Unfamiliarity with online platforms
- Unregulated financial services
How COVID-19 has impacted money laundering
The FATF report discussed inadequate processes with “criminals finding ways to bypass Customer Due Diligence measures by exploiting temporary challenges in internal controls caused by remote working situations, in order to conceal and launder funds.”
You can read the full report here.
It’s important to note conveyancing is facing some unique challenges. The stamp duty holiday has created a feeding frenzy, and criminals are targeting buyers and vendors desperate to take advantage of the savings.
Given that increased demand is often accompanied by understaffing in law firms and estate agencies, there is a concern that “cutting corners” to get through the volume of work will help money launderers.
The risks of not complying with AML
HMRC visited at least 50 estate agencies in England due to suspected trading without the legally required AML registration, and confirmed it would be taking action against these firms in the form of fines, publication and criminal proceedings.
The following were fined for breaching anti-money laundering rules:
- Purplebricks was fined £266,793
- Countrywide was fined £215,000
“These breaches are failures in having the correct policies, controls and procedures, conducting due diligence and timing of verification,” HMRC stated.
Click here to see a full list of these businesses on the official government website.
The SRA has investigated 172 law firms over the last five years for anti-money laundering non-compliance which resulted in 40 solicitors either being struck off, voluntarily leaving the roll or suspended.
How to build AML resilience into your processes
Now we’ve entered a second lockdown, ensuring your AML procedures are in place, followed each time, and robust enough to satisfy the regulations is paramount. The Law Society has identified three red flags for property professionals to take special notice of:
- difficulties in getting client ID
- difficulties in getting source of funds and wealth documentation
- pressure to take on matters which would usually fail your risk assessment
OneSearch Direct has been looking for ways to provide clients with additional safeguards, and it is for this reason we have chosen to supply SmartSearch AML checks.
This allows you to simplify and speed up your due diligence, with a high first-time pass rate. With everyone using the same process, you ensure your robust AML processes are branch-wide.
- UK business checks returned in minutes
- International Business AML, PEPs and sanctions available
- SmartAML and SmartIDV to capture and verify information reliably
- Daily, weekly or monthly ongoing monitoring of clients
SmartSearch data is taken from leading authorities:
- Experian
- Equifax
- Companies House
- Dow Jones
You receive this information in a clear, easy to understand document.
- Instant overall Pass or Fail icon
- Data sources visible
- Any anomalous areas are colour coded for instant interpretation
We fully recommend you take a look yourself and see if this report will make your due diligence faster and easier.
You can download a sample report by clicking here.
You are cordially invited to a FREE webinar to help protect your firm against 80% of common cyber attacks, through a government backed accreditation scheme, Cyber Essentials.
Taking place on Tuesday 4th June at 11am, the webinar will provide practical solutions to comply with Requirement 6.2 of the CQS Core Practice Management Standards, which states: “Practices must have an information management and security policy, which should be accredited against Cyber Essentials”.
According to the Solicitors Regulation Authority, there has been a continuing increase in reports of cybercrimes, with £10.7m of client money lost in 2017. Almost 80% of cybercrime is attributed to email modification fraud. The good news, however, is that firms are able to stop client money being stolen by taking quick and easy steps covered in the webinar.
The National Cyber Security Centre, the UK’s independent authority on cyber security, states: “Cyber attacks come in many shapes and sizes, but the vast majority are very basic in nature, carried out by relatively unskilled individuals. They’re the digital equivalent of a thief trying your front door to see if it’s unlocked” With latest breach analysis revealing 23.2 million victim accounts worldwide used 123456 as their password, it’s imperative to tighten security measures across the board.
Designed to help your firm improve defences and publicly demonstrate your commitment to cyber security, Cyber Essentials covers five key areas of vulnerability:
- Having secure internet connection
- Having secure devices and software
- Having control over who has access to your data and services
- Having your business protected from viruses and other malware
- Having your devices and software safely up to date
Lidia Quinlan, Head of Sales, OneSearch Direct explains: “With high-profile breaches from the likes of Facebook, Cambridge Analytica, and Dixons Carphone fresh in the minds of the general public, there are growing concerns about sensitive information becoming compromised. When it comes to one of the biggest financial decisions of your customers’ lives, they need to feel reassured that you take IT security seriously, and can shield them from cyber attacks. “Not only does Cyber Essentials help safeguard your firm against the most common cyber threats, it protects your firm’s reputation and reinforces your commitment to fight against cyber criminals who are blighting our industry. The ability to get certified within only two days creates peace of mind for all stakeholders, and helps your firm achieve excellence in compliance. This webinar is a must for all involved in conveyancing.”
Tom Lyes, Key Relationship Manager, Lawyer Checker comments: “This highly practical session will discuss the risks associated with the transmission of funds, email modification fraud and other relevant threats which cause concern for law firms. Although the thrust of the discussion is around conveyancing, there is a very real risk in other departments where there is any transmission of funds; like the execution of a will, the award of compensation or claims, etc. This will link closely to the recent changes in CQS for 2019.”
The 1-hour webinar will be allocated on a first-come, first-served basis. To register for FREE, click here.