How arduous are anti-ML checks?

MrManager

I'm just about to start the process of buying a property and discovered that the solicitor, lender, etc will not just need to see proof of funds, but will actually need to know the source of my deposit for anti money laundering purposes. This shouldn't be a problem in theory, but my savings have built up over years and I have shifted them back and forth quite a bit between various different savings accounts and shares. Some of the banks are based elsewhere in the EU and many of the accounts are no longer open. So really trying to trace everything to its original source would be quite an effort.

Is this really what's going to happen? Am I going to need to dig up years worth of bank statements? Do most people just have a single pot of money with an easily defined source?

davidmcn

MrManager said:

Am I going to need to dig up years worth of bank statements?

Unlikely. See other current thread on same topic:
https://forums.moneysavingexpert.com/discussion/6239613/proof-of-funds

pinkteapot

Our purchase before last we had savings that had built up over years to put in. Solicitor just wanted something like the last three months of bank statements for each of the accounts the money was in. We didn't have to show its accumulation prior to that. 

Money launderers don't want to sit on the cash for long. They get money in then spend it again very fast, so the solicitor just wants to know you didn't receive £200k a few weeks ago and are now buying a house with it. If you did (as in the case of family gifting deposits), whoever gave you the cash needs to provide evidence of where it came from. If it's long-term savings then checking you've had it for a few months covers the solicitor's a***. 

Most recent purchase, most of the money came from the sale of a previous house (we'd sold up and rented for a year before buying again). For that one, we provided the completion statement from the solicitor who handled the sale, a bank statement from the time of completion showing the money being received as a lump sum, then most recent bank statement showing about the same amount (plus interest). 

Davesnave

How arduous are anti-ML checks?

Anti Mother in Law checks are very worthwhile, however arduous.

Falafels

We were both asked to supply bank statements for the previous three months, with evidence of the source of any payment over £3000.

I sent them the monthly summary statements (rather than the pages and pages detailing purchases from Amazon, bills etc etc) for the three months, the completion statement from the sale of my house, plus a letter with details of my redundancy payment, and it all went through fine. They didn't ask about the source of long-standing savings.

Quite painless!

MrManager

That's very reassuring, thank you. The mortgage advisor I'm working with was telling me that the solicitor would require evidence for the funds having been in my account for a "minimum of 3 years". Now I'm wondering if she maybe meant 3 months and just typo-ed "years"... Let's hope she doesn't do something like that with the mortgage documents!

parkingadvice1212

I sent my last month's bank statement (which I only use to have my salary paid into anyway), my partner's last month's bank statement, my mother's last month's bank statement and my partner's mother's bank statement from 3 months before.. no issues. (gifted money towards deposit)

Thrugelmir

MrManager said:

That's very reassuring, thank you. The mortgage advisor I'm working with was telling me that the solicitor would require evidence for the funds having been in my account for a "minimum of 3 years". Now I'm wondering if she maybe meant 3 months and just typo-ed "years"... Let's hope she doesn't do something like that with the mortgage documents!

Sizable house deposits rarely materialise in a matter of a few months from earnt income. 

gingercordial

We were asked for three months of bank statements for the savings accounts we were using.  The vast majority was already an opening balance in my ISA at that point, as we'd saved over several years, and they didn't ask for anything more on it. 

As an accountant I have had anti-ML training, and I can say that personally I would be more inclined to ask questions if the deposit were disproportionate to your level of income such that you couldn't possibly have saved it yourself.  So if you earn £20k but have a six-figure sum I might ask further questions on where that had come from.  Obviously there are plenty of legitimate explanations (inheritance, redundancy, divorce settlement etc) but I would want to know.  However bear in mind it is for your individual solicitor to satisfy themselves, and some may be stricter than others in how much digging they want to do.

(Because I'm an accountant I went a bit overboard with ours, and colour coded with highlighters all the transactions to our ISAs and other savings account from our current account before sending a scanned dossier to the solicitor.  I enjoyed doing this immensely, to the amusement of my husband.)

davidmcn

gingercordial said:

if you earn £20k but have a six-figure sum I might ask further questions on where that had come from.  Obviously there are plenty of legitimate explanations (inheritance, redundancy, divorce settlement etc) but I would want to know. 

But if they say "it's an inheritance from years ago, no of course I don't still have any paperwork about it", what's your next move? It wouldn't sound inherently suspicious to me - as above, if there's money-laundering going on then the cash typically gets moved around quickly, it's not going to just "rest" in somebody's account for years.

gingercordial

davidmcn said:

gingercordial said:

if you earn £20k but have a six-figure sum I might ask further questions on where that had come from.  Obviously there are plenty of legitimate explanations (inheritance, redundancy, divorce settlement etc) but I would want to know. 

But if they say "it's an inheritance from years ago, no of course I don't still have any paperwork about it", what's your next move? It wouldn't sound inherently suspicious to me - as above, if there's money-laundering going on then the cash typically gets moved around quickly, it's not going to just "rest" in somebody's account for years.

True on the movement of cash.  What I mean is that if someone had a very large deposit compared to their income, that is when I'd want to go back further than three months initially to check that it hadn't actually arrived just before that - yes if it has been there for years it probably isn't dodgy! 

It would depend on the circumstances and if there was anything else to make me suspicious.  If they're saying inheritance, and if things *still* looked odd in other ways, probate records are available aren't they, so request those?  I don't think I'd necessarily just accept an immediate "I don't have paperwork" if other things were setting off alarm bells too.  It will be whatever that solicitor can get comfortable with and if that means you need to get paperwork somehow, that's their final decision at the end of the day or they are within their rights to refuse to act.