Fines for agents rise rise steeply as AML clampdown kicks in

The average Anti-Money Laundering fine issued to estate agents for non-compliance in 2022-23 is almost half as large again as in the previous 12 months. 

Data for the 2022-23 financial year shows the median AML fine for an agency is £5,350. This marks a 49 per cent increase versus the average fine issued during the 2021/22 financial year. 

For letting agencies alone the median fine is much larger - £9,050.

While agency fines overall remain the third-lowest average fine since AML supervision was introduced in 2017, the increase does reverse the previous downward trend seen since 2019-20.

Since the introduction of AML supervision in 2017-18, agents have been fined £2.5m in AML penalties. 

When it comes to the number of individual fines issued by HMRC since 2017, estate agents have the worst record of any business sector. 

Agents now account for 49.8 per cent of the total 544 penalties issued across all sectors. 

The latest data highlights that while the estate agency sector is by far the most frequently fined, it’s reasonable to assume that the reasons for being penalised are less severe than in other supervised industries.

Tim Barnett of Credas Technologies, the firm that undertook the analysis of fines, says: “Although the agency sector remains one of the most frequently penalised for AML breaches, the average fine issued had been in slow decline, indicating that the industry was very much heading in the right direction. 

“However, this positive trend has, so far, been reversed this year. This highlights the far tougher landscape we’re facing at present, with many agents likely feeling the pressure of an uncertain market. 

“As a result, it’s likely that they have been focussing their attention on overcoming the problems facing them, with AML due diligence being put on the backburner, albeit with often costly consequences.”