Property buyers are resorting to drastic measures to meet the stamp duty holiday deadline amid fears thousands of deals could fall through.
Thousands of homebuyers are hoping to benefit from the temporary lifting of SDLT for properties worth up to £500,000 in England and Northern Ireland, following the decision to extend the holiday from March.
However, as the deadline gets ever closer there are concerns that mortgage applications and contracts may be rushed through, providing opportunities for criminals and fraudsters to take advantage of a system under pressure, according to Martin Cheek, managing director at SmartSearch.
The West Yorkshire-based firm said there had been increasing levels of fraud and money laundering attempts since the outbreak of coronavirus, as criminals can easily bypass manual security checks.
Cheek commented: “In a busy market as we have today, which is driven by the rush to beat the stamp duty holiday, it’s a sad fact that criminals and their enabling agents, will look to exploit the opportunity.
“Property transactions remain the number one target for money laundering and with the volume currently going through the system there is a danger that some AML checks and procedures may be rushed through.
“But in a way the bigger danger is from agents and legal firms still using manual methods of verification for anti-money laundering processes. Document forgery is a major industry with highly sophisticated products available on the black market.
“It’s almost impossible for even the most experienced broker or agent to tell the difference. If they’re under time pressure, or just seeing a passport image copied into an email, there is a real danger criminal applications will get through unchecked.”
According to Cheek, regulated businesses operating in the property market should be looking to switch to electronic verification as a secure, fast and accurate method of onboarding new customers and remaining compliant with Financial Conduct Authority (FCA) regulations.
He added: “Financial services firms who are unwittingly processing applications from criminals will be held responsible by the FCA so it’s clearly in their interest to do everything they can to prevent them even getting through,” he added. “The most effective way of doing that is by switching to electronic verification.”