A survey of homebuyers undertaken by Credas Technologies – an identity verification provider – reports that around a quarter of the 1,201 participants were not subject to any identification checks by selling agents when seeking to purchase a property.
Further to this, when asked whether they had been required to provide proof of their current address, 30% of respondents revealed they were not required to provide the same.
The shocking research also stated that 13% of respondents were not asked to verify their identity by their solicitor/conveyancer once the transaction had started to move forwards.
Tim Barnett, CEO at Credas Technologies surmises that the failures to carry out such checks arise from oversights due to stretched resources, rather than a ‘cavalier attitude’. He suggests that implementing a suitable onboarding platform would prevent transactions from proceeding until the purchaser’s identity had been checked.
Tim Barnett commented: “For the vast majority of those operating within the property industry, failing to verify the identity of a potential buyer may sound unbelievable. Not only is there a legal requirement to do so, but it can also be incredibly detrimental should they fall foul of criminal activity.”
The survey results will be very alarming for legal professionals and their professional indemnity insurers. As reported in the 2018 ‘Dreamvar’ case, the solicitors acting for both buyers and sellers of property can be held liable to the buyer if there is a fraudulent sale (See: Brunel News August 2018).
Matthew Golightly, Associate Director – Claims & Technical of Brunel Professions said: “The findings reported by Credas Technologies are shocking and a cause for concern. If they are truly representative of market practices, they indicate some significant concerns for AML procedures. The results also raise the question of whether the same overstretching exists in relation to verification of the vendor’s identity. This would of course have implications for the potential liability of purchasers’ solicitors in fraudulent transactions like the Dreamvar case.”