When your solicitor asks for bank statements dating back months, please believe us when we say they are not just being difficult! Gemma Francis, a Conveyancer in WSP Solicitors' Residential Property Law Department discusses the reasons behind why solicitors need to verify the source of your funds.
Why is it important to verify the source of funds?
Money laundering costs the UK in excess of £100 billion pounds a year and as there are huge sums of money involved in the Conveyancing industry, it is a prime target for fraudsters and criminals to launder their money.
What are the legal requirements for verifying source of funds?
Under regulations 27 and 28 of The Money Laundering, Terrorist Financing and Transfer of Funds Regulations 2017, Solicitors have a duty to undertake customer due diligence which includes verifying identity and source of funds.
It is also a requirement of your mortgage lender, if you have one. There is an expectation for us to check your identity and source of funds to ensure that the details on your mortgage application are accurate.
The point is to prevent criminals using law firms to launder money.
It is not sufficient to just show a statement showing the funds available. We need to see how those funds have been accrued.
Initially, 3 months' worth of bank statements would be requested. If you have built up the funds in a savings account, we will need to see the statements from the savings account and your current account. This is so that we can identify a regular savings pattern.
Whatelse is important to know about verifying source of funds?
Should your funds be acquired through inheritance or the sale of a property, we will require evidence from the Solicitor who handled that transaction confirming the amount and the reason. Statements will be required to see the funds entering your account and where they have been since.
Please remember that if you are continuously moving funds around, statements will be required for each account.
The above will also apply to anyone who is gifting or loaning funds to you for your transaction.
All documents and information provided to us will be kept strictly confidential.
If you are purchasing a property, or are required to provide funds to us for any transaction, be prepared to provide us with as much information as possible. The sooner you are able to provide the documents to us, the sooner we can confirm we are satisfied.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.