Estate Agents charging £75 for ID/AML Checks

aggrieved100

I'm trying to buy a house and have had the offer accepted. I'm now stuck in between two posts. One being my absolute stubborn principles. The other being a flagrant industry of profiteering estate agents trying to squeeze every angle of profit out of the process.

They have stated "Unfortunately, all buyers that have an offer accepted on a property have to pay a small fee of £75.00 to do the AML checks as this shows that you are legally complying with HMRC legislation."

When challenged on the basis I can satisfy all AML checks with the required information and mortgage verification, there response is:

"We do need to complete our ID/AML checks to be compliant with HMRC legislation, we are not able to proceed unless we are legally compliant and the checks have been completed. The small fee of £75 is just a one off payment and is not per person, you can also opt out of the subscription on the call. The other benefits include: Move Protection up to £2570, A will worth up to £125, Unlimited legal advice.
Are you happy for us to re-book the call so that we can get the process underway?"

The online guidance on this is really poor. The requirement for AML checks to be undertaken is correct. The mechanism in which these check are to be undertaken is not clear. The costs associated with them appear to be £2-£5 through normal service functions. The EA's are outsourcing the minor effort needed to undertake the checks themselves to third parties who then charge a massive fee while giving the EA a big kick back. You then have all your personal data passed to the third party and are strung up on a membership subscription for a plethora of riff raff services you likely don't require.

My current response and holding line is:

"...I'm not preventing you being legally compliant, I'm just refusing to pay costs which are yours to serve.

Feel free to let the seller understand that this is not standard industry practice and we do not wish to suffer this payment and feel aggrieved with the situation, however still wish to proceed."

I've researched some to of the other forums and information online but its all quite hearsay and convoluted. Would value the input from anyone facing the same situation and anyone with some absolute knowledge on the market stance. In the meantime I'll get the kids set up in the tent, winter is coming.

Extract of the subscription offer below:

user1977

Yes, you'll find threads on this topic here (or more likely on the House Buying board since it isn't really a mortgages issue). No reason why a buyer ought to be paying such fees and it isn't normal practice (though other people seem to be getting asked).

I wonder what "HMRC legislation" they're thinking of? That could be a fun question to ask.

dunstonh

Estate Agents charging £75 for ID/AML Checks

There have been a few threads like this recently.  Its a disgraceful abuse in my opinion.

They have stated "Unfortunately, all buyers that have an offer accepted on a property have to pay a small fee of £75.00 to do the AML checks as this shows that you are legally complying with HMRC legislation."

There is no HMRC legislation in this respect.   It is other legislation.

The online guidance on this is really poor. The requirement for AML checks to be undertaken is correct. The mechanism in which these check are to be undertaken is not clear. The costs associated with them appear to be £2-£5 through normal service functions.

Typical cost is between £1.70 and £3.50.     Most financial services firms have been doing these for many years and do not bill extra for them.  The law requires firms to comply and its part of being in business.   However, electronic methods are not necessary.    The old manual way is still allowed and that costs nothing other than time.

I have had access to three services.  Professional Office, GB Group and Experian.    £1.70 plus VAT.   Professional Office and GB Group both validate driving licences and passports (along with a range of other things if you have them) and do electronic checks without any documentation - i.e. a pure electronic check - and PEP & Sanctions checks.   
£2.04 for about 30 seconds work if it passes or about 2-3 minutes if it fails due to sanctions/PEP checks that need further investigation.   If the electronic ID check fails because of lack of data or inconsistent data, then you revert to the old fashioned way of passport, photo DL, utility bill, council tax bill etc.  

The EA's are outsourcing the minor effort needed to undertake the checks themselves to third parties who then charge a massive fee while giving the EA a big kick back. You then have all your personal data passed to the third party and are strung up on a membership subscription for a plethora of riff raff services you likely don't require.

That particular estate agent may do but normal AML/ID checks are one off transactions and not ongoing.   

I've researched some to of the other forums and information online but its all quite hearsay and convoluted. Would value the input from anyone facing the same situation and anyone with some absolute knowledge on the market stance. In the meantime I'll get the kids set up in the tent, winter is coming.

Basically, the EA is taking the P.  It is really is as simple as that. 
They are bolting on a high margin for something they are required to do (not the way they do it but the end result of verification of ID).  They are turning a legal requirement into a cash cow.