Published 7th September 2022
Buying or selling a property requires the sharing of a large amount of personal and financial information. Gain a better understanding of the regulations in place and what that means for us during a property transaction.
With identity theft is on the rise, there is cause for concern. Fraudsters are using the buying and selling of buildings and land for illegal and money laundering purposes. This can pose a risk as to how safe the personal information we share really is. So what is out there to protect us and what can we do ourselves to better safeguard our personal information?
When involved in a property transaction, there is legal duty for estate agents, conveyancers, and lenders under HMRC’s regulatory requirements and Money Laundering Regulation to confirm who we are and where the money is coming from if buying a property.
Those responsible for this, work to official standards known as Know Your Customer (KYC). This involves verifying the identity and address of new and existing clients as well as carrying out anti-money-laundering checks (AML). Failure to do so can lead to hefty fines or even imprisonment so correct procedures to screen clients must be followed.
Having an awareness of the regulations and why they have been put in place helps consumers to be aware of what to expect and be confident that the companies you are dealing with are working to the correct standards. The government website has more information.
The regulatory requirements mean you are required to provide a proof of ID and proof of funds using certain documents. Proof of ID requires that you show an original document such as a current passport or a UK photo driving licence to confirm your name and picture. Proof of address can be done using a document such as a council tax or a recent utility bill.
Proof of funds is required not only to check you have the money to pay for the property but to also check that the money you have has come to you legally. This is required irrespective of whether you have a deposit, are a cash buyer or buying with a mortgage. Required information can include bank statements to show availability of funds, evidence as to where the money is coming from, for example if it is being gifted or is from an inheritance, and past bank statements to show how money has accumulated. Getting these organised and making sure you have what you need is a good idea to get yourself prepared and save you time.
Physically handing over or emailing documents to the relevant people has historically been the most common way of submitting the required information. However, this can create its own degree of risk, so it is important to ask how a company handles your information to ensure it is secure. Consider questions such as how long are documents kept until they are destroyed, who has access, is information being uploaded onto a password protected and secure portal, is there secure storage for personal data?
With the big shift to digital and looking at ways to better protect our information and be compliant to the latest legislation, using high security online paperless ID checking systems are becoming more and more common place. This will involve logging into a secure portal or being sent a secure link to which you can upload the required documents. Advanced technology allows you to upload your own selfie and face biometrics are used to check the authenticity against your other photo ID such as your passport. Artificial and human intelligence is running in the background to verify the information and a verification report is provided with the results of the checks. It’s safe, secure, and quick although it is always wise to do some research into the system being used to give you peace of mind that your information is safe.
Some online conveyancing support company’s such as Home Legal Direct will carry out identity checks in a more secure way than the more traditional high street conveyancing solicitors, by using an online secure portal. These not only allow the safe upload and storage of personal data, but also provides verification of your checks to your conveyancer.
Oliver Meddick, Chief Executive Officer at Home Legal Direct says ‘Carrying out the required identity and AML checks through an online identity verification service can benefit customers by not only helping to speed up a necessary step in the conveyancing process but importantly to give peace of mind that personal information is being dealt with safely and securely. This is a priority in this day and age and using advanced technology that is safe and secure is paramount.’