‘Lack of security makes lawyers weak link in money laundering and fraud scams’

Purchasing property and/or setting up a company provides criminals with a means of hiding transactions, and involving a solicitor in the process means added credibility.

But research carried out by ID verification firm Credas shows that 24 per cent of law firms do not have a dedicated AML officer in place, and 37 per cent are using a paper-based storage system for filing their AML data.

As of June 2017, the UK government introduced new regulations to ensure that law firms are doing everything in their power to tackle money laundering.

To enforce this, the Solicitors Regulation Authority (SRA) is monitoring the effectiveness of AML processes and launching investigations into those firms at risk of being non-compliant.

Over the past three years, the SRA has closed down eight law firms over money laundering concerns* and a further fourteen companies closed down voluntarily after the SRA raised concerns around inefficient AML checks.

Rhys David, CEO of Credas, said: “For those in the legal sector, anti-money laundering checks are becoming much more stringent, and now is really the time to streamline processes and make sure everything is in order before investigations take place.

“The vast majority of law firms are aware of the risks of money laundering and are making strides towards tackling financial crime within the sector, but unfortunately weak processes and undertrained staff can leave the door open for criminals. It’s so important to have strong and secure AML processes in place, not only to protect the business and its customers, but also to avoid investigation and the risk of closure.”

Those interviewed estimated that the time taken to complete AML checks took up over four business days per month, with the main barriers to completion being cited as getting hold of the correct ID documents as well as time constraints.

Rhys continued: “At four business days per month, the amount of time taken to complete AML checks is a very long and costly process, made that much harder because clients are often confused by the type of identity document they need to provide.

“With lengthy processes such as credit and DBS checks also being a high priority for law firms, it comes as no surprise that many are being squeezed for time when it comes to AML compliance. That’s where Credas can help to take some of the burden away for firms, by speeding up AML processes and giving them back the time to take care of clients.”