Estate Agency is the Only Sector to See Increase in Average AML Fine Issued

The average Anti-Money Laundering (AML) fine handed to the estate agency sector has increased by 63.7%.

However, while the average fine issued to estate agents has increased, the sector still ranks with some of the lowest fines issued when compared to other sectors.

Across five major industries – Accountancy Services, Estate Agency, Money Services, Trust or Company Services, and High Value Dealers – the average AML fine has increased in size by 19% in the past year, rising from an average £75,078 in 2020-21 to £89,372 in 2021-22.

This average increase has been driven entirely by the estate agency industry, with the average fine up by 63.7%, from £3,577 to £5,853.

In fact, of the four remaining industries, three have seen the average AML fine shrink in the past year.

Fines for High Value Dealers have shrunk by -69.2%, Accountancy is down -38.7%, and Money Services dropped by -29.5%.

Meanwhile, no change has yet been reported for Trust and Company Service Providers as records only started in 2021-22.

The good news for estate agents is that the severity of AML fines issued within the sector is the second-lowest of all sectors.

With an average fine of £5,853, only Accountancy is lower at £3,547. In contrast, the average fine handed out for Money Service Providers is a hefty £167,457.

However, the average AML fine handed to estate agents is forecast to increase further before the year is out, with Credas Technologies, the company responsible for the research, forecasting that it will hit £6,285 in 2022-23, a year in which the sector is estimated to pay a total of £177,570 in fines.

While this is certainly a substantial amount of money, it pales in comparison to the £772,618 worth of fines handed out to estate agencies in 2021-22 and is almost £850,000 less than the annual fines peak of 2019-20 when agents were forced to pay almost £1.1m.

What’s more, it’s forecast that the volume of AML fines issued to the estate agency sector is also set to drop in 2022/23.

Therefore, overall, while the average fine issued this year may be set to increase, it is expected that there will be fewer fines in 2022/23.

Tim Barnett, CEO of Credas Technologies, said:

“On the face of it, an increase in the average AML fine issued to estate agents may seem like a backwards step, but when taken in context of where the sector was, we’re certainly moving in the right direction.

While the average fee may have increased, the total sum handed down in fines and the sheer volume of these fines is expected to fall substantially come the end of the 2022/23 financial year.

At the same time, the severity of fines issued to the estate agency sector is extremely low when compared to many other sectors.

This suggests that those who do fall foul of AML sanctions are doing so accidently and due to a lack of awareness, rather than as the result of any intended illicit activities.

In fact, the nation’s estate agents deserve praise for the manner and speed in which they have managed to get their AML ducks in a row at a time when the market has still been booming and they’ve been busier than ever, processing a record number of transactions and dealing with the practical fallout of a global pandemic.”

AML fines data sourced from HMRC

Notes:
1. Art Market Participants and Lettings Agent Businesses not under HMRC AMLS Supervision until 10 Jan 2020
2. Penalty values for 2019 to 2020 and 2020 to 2021 has been amended to reflect the revision of some penalties