state and letting agents in the UK are being reminded of their responsibilities when it comes checks on tenants, buyers and sellers with new data protection rules being introduced in 2018
The compliance warning comes from tenant referencing provider FCC Paragon, which is also warning agents to consider Anti Money Laundering (AML) checks in the context of new data protection rules.
Introduced in June, the fourth Anti-Money Laundering Directive requires agents to carry out due diligence on both buyers and sellers.
Although it was confirmed in March that letting agents would not be required to carry out mandatory AML checks on tenants and landlords, many still do, particularly those working in London.
‘The average agency will now be making more AML checks than ever before and it’s vital that they are carrying out the correct procedures and are fully aware of the law,’ said Bryn Cole, managing director of FCC Paragon.
‘Agents have been sanctioned over AML failings in the past and the new directive requires them to do more work and so it’s vital that all firms get up to speed, if they haven’t done so already, Cole pointed out.
What’s more, FCC Paragon explains that firms who don’t consider their General Data Protection Regulation (GDPR) obligations when making anti-money laundering checks could find themselves in trouble.
GDPR, which replaces the current Data Protection Act 1998, comes into force in May 2018 and the new legislation will affect the way agents store, process and collect data. Under the new rules, all communications will be required to only include information that the recipient has consented to receive.
‘When agents carry out AML checks, they are dealing with extremely personal, sensitive data and it’s clear that GDPR regulations leave little margin for error on the part of the agent,’ Cole explained.
‘There’s now less than 200 days until GDPR is formally introduced and that’s why agents need to be planning and strategising continuously between now and May to make sure their processes are efficient, while remaining compliant,’ Cole added.
The firm has released a new product called Instant AML to help agents to comply with new legislation and carry out effective AML checks which confirm the identity of buyers and tenants, while mitigating the risk of accepting fraudulent documentation.
FCC Paragon will now use a wider range of corroborative and primary checks, while carrying out checks against Government sanctions, the Politically Exposed Register and the Death Register.
Fully compliant with the Joint Money Laundering Steering Group, Instant AML is there for agents to confirm the identity of buyers, vendors, landlords and tenants, providing a pass or refer result in under one minute.
‘We’re hoping this new product can help agents as part of their strategy to comply with GDPR while conducting proper AML checks. As lettings sector regulation increases and agents are faced with more administration, they will need to take advantage of the right technology and supplier products in order to allow them more time to sell and let property and ultimately grow their businesses while remaining profitable,’ Cole concluded.
