Solicitor asking for proof of funds

TammyBright

Yippee, we have had an offer accepted on a flat and we are in the following process!
My Father is gifting us with part of our deposit and the solicitor has asked for his last three bank statements for proof of funds, my Dad is not keen to pass this information on (he likes to keep his money private). Why are they asking for his bank statement and will they allow us to continue without the bank statements?

kingstreet

The solicitor is satisfying the money laundering requirements in establishing that the money is there and hasn't been transferred into the account in the last few days from another source.

It may be a requirement of the lender as well. So no statements may mean no mortgage. You are unlikely to be able to proceed without the evidence requested.

TammyBright

As I suspected and as I relied to my Dad, but “Dads know best” or at least think they do My Dad is going to call the solicitor. Thanks for your reply!

Richard_Webster

They want to see the bank statement to make sure that there are no suspicious entries like a large credit from some Bank in Bogota!

Arthurian

Could you please clarify, OP, had Dad already given you the money when they asked for the statements, or had he just promised you the money? If the latter, I can understand they just want the statements as proof of funds being available. I am rather surprised at them needing to check your Dad's statements for evidence of money-laundering, but am willing to bow to the greater experience of previous posters.

flora48

I was asked where my funds had come from when I bought last year, I admit I was a bit taken aback at first but it was explained that it was to check for money laundering. I would expect my EA to ask for proof of funds before accepting an offer as my cash buyer was anything but and we lost months on his offer.

FireWyrm

Arthurian wrote: »

Could you please clarify, OP, had Dad already given you the money when they asked for the statements, or had he just promised you the money? If the latter, I can understand they just want the statements as proof of funds being available. I am rather surprised at them needing to check your Dad's statements for evidence of money-laundering, but am willing to bow to the greater experience of previous posters.

No, it's true. Bloody ML rules mean that they have to examine the statements for all sources of funding. So, if great aunt Mable gifts you a deposit, it had better have been in your account more than three months or they want to see where it came from. Personally, I can think of easier ways to launder money, casinos for instance, but this whole thing comes from on high so it must be useful, well thought out legislation mustn't it. Annoying I know, butnthe solicitor is only following the law and it's his behind in a sling if you are laundering money for Bogota.

Yorkie1

Have the ML rules changed in the last 15 months?

I was in the same position and there was absolutely no need for any of these requirements. Just a letter from my parents confirming the money was a gift.

FraudBuster

Yorkie1 wrote: »

Have the ML rules changed in the last 15 months?

I was in the same position and there was absolutely no need for any of these requirements. Just a letter from my parents confirming the money was a gift.

FSA/PN/056/2011
22 June 2011
Tracey McDermott, acting director of enforcement and financial crime at the Financial Services Authority (FSA), today highlighted the continuing importance of financial crime within the future UK regulatory landscape.

Continued:

http://www.fsa.gov.uk/pages/Library/Communication/PR/2011/056.shtml

kingstreet

Evidence of identity, evidence of address and funds source aren't obtained to prevent money laundering there and then. What each link in the chain of a financial transaction is expected to do is to add to the audit trail available to the regulators and the police in the event of a possible money laundering investigation in the future.

For example, in a house purchase transaction, I'll perhaps obtain copies of a passport and bank statement. I'd ask to see and copy four different items (two for each ID and address) if I wasn't doing a face to face transaction. The solicitor will get a driving licence and utility bill with a statement showing source of deposit funds. The lender will undertake an electronic identity check and may request payslips and P60 showing address details, employer, tax details and NI number.

By completion, we've built up a full picture of the borrower which can be added to other profiles to show trends which may lead to money laundering charges later.

Londonsu

kingstreet wrote: »

Evidence of identity, evidence of address and funds source aren't obtained to prevent money laundering there and then. What each link in the chain of a financial transaction is expected to do is to add to the audit trail available to the regulators and the police in the event of a possible money laundering investigation in the future.

For example, in a house purchase transaction, I'll perhaps obtain copies of a passport and bank statement. I'd ask to see and copy four different items (two for each ID and address) if I wasn't doing a face to face transaction. The solicitor will get a driving licence and utility bill with a statement showing source of deposit funds. The lender will undertake an electronic identity check and may request payslips and P60 showing address details, employer, tax details and NI number.

By completion, we've built up a full picture of the borrower which can be added to other profiles to show trends which may lead to money laundering charges later.

And what if the person you are dealing with does not have a passport?? a UK citizen born in this country and has had no reason to leave is not actually legally required to have a passport and by the same token unless a person drives there is no legal requirement to have a driving license.

In fact there is no legal requirement for anybody to possess photo ID at all.

When I sold my flat and bought a house for cash (out of the proceeds of the flat sale) I didnt provide anyone with photo ID as I dont have any.

I told my solicitor as there is no legal requirement to have photo ID there cannot be a legal requirement to show photo ID, he used other means and so did the EA who was selling my flat, the EA who sold me my house didnt even ask for any ID what so ever.