Solicitor being overly invasive for proof of funds for a deposit.

DullGreyGuy

MattMattMattUK said:

DullGreyGuy said:

sr96_ said:

i am a first time buyer and i was kindly gifted £10,000 by my grandmother to support the deposit. my solicitor is asking for lots of proof of funds, including inheritence to my grandmother from my grandfather's death in 2008. We have managed to find the will and probate from the government website but they are now asking for bank statements to show the funds going into her account. She is in her late 70s and the transfer of money was now 17 years ago its causing some distress in our relationship and i really dont understand how we are supposed to be able to produce bank statements from so long ago.  We have shown the money in the same account since when it was last changed in 2016 but i dont believe we can product the original transfer in 2008.Can anyone suggest what we can do next?

Solicitors have a legal duty under anti-money laundering rules, unfortunately the rules themselves are vague and so it's down to individual firms on how they should be interpreted. Clearly some will be willing to run the risk of massive fines for not doing appropriate checks and others will want to go full belts, braces and superglue to ensure they won't be accused of failing. 

Personally dont think there is much harm in them asking and given the timescales involved its doesnt feel like a massive thing to me for you to return to them saying you've asked but they are no longer available. The real test is how they respond to that. 

Your ultimate decision is to move to another solicitor but "how weak are your AML processes" are probably not how you want to go about selecting a replacement solicitor firm, you will incur additional costs switching and you may find the new firm take an even tougher line than the original firm

Whilst I generally agree and often those complaining about AML rules on here are normally the ones being unreasonable, I do think sometimes solicitors often seem to lose the plot when it comes to asking for evidence, some appear to have been sniffing the superglue!

I do think that there needs to be better guidance on how the AML rules are enforced, leaving it open to each solicitor to interpret based on how rational or neurotic they are does not seem to work. I remember the utter frustration of dealing with mine when I bought, first they wanted three months, then six, then a year, then three years (at that point I gave them five years, as well as the ten years tax returns they had already had a bundle from my accountant), then they decided they wanted ten years. I told them that I had given them five when they asked for three because that was as far as I could go back online and anything longer required a special request and a delay, they said they wanted ten. I put the request in to the bank which I was told up to 60 days and put in a complaint with the solicitors that they were being unreasonable. In the end I got the bank statements after a few weeks and they then said that they wanted twelve years, I phoned and spoke to a senior partner and had an argument with him, did they want to do their job or did they want me to take them to the Legal Ombudsman. The senior partner tried to claim I was being unreasonable in threatening to take them to the ombudsman (probably because of the fee they would be charged), however the next day after "reviewing my bank statements" miraculously decided that a decade of bank statements was enough. All in more than a month of delays because they firstly did not ask for what they wanted at the start and then continued to be neurotic throughout the process. 

Certainly for normal solicitors that are overseen by the SRA and Law Society there is advice from those bodies on AML

Conveyancers however go into the CIC rather than the SRA and whilst I imagine they'll have produced something similar, or maybe even put their own name over the other one, but haven't personally seen it. 

Even then though because the authors dont want to be taking on the liability and given that its covering everything that may result in the solicitors handling monies from house purchases, injury claims, contract disputes, IP (if not a patent lawyer) etc. 

sr96_

We have been into TSB today and they have told us the records no longer exist beyond 10 years as they are destroyed for security reaons and were also lost as part of the de-merger with Lloyds. The bank were actually very concered that they were even asking for records back so far. 

i've now told them this, so will see how it goes, next step is to make a complaint to the senior partners or look for a new solicitor. 

saajan_12

MattMattMattUK said:

DullGreyGuy said:

sr96_ said:

i am a first time buyer and i was kindly gifted £10,000 by my grandmother to support the deposit. my solicitor is asking for lots of proof of funds, including inheritence to my grandmother from my grandfather's death in 2008. We have managed to find the will and probate from the government website but they are now asking for bank statements to show the funds going into her account. She is in her late 70s and the transfer of money was now 17 years ago its causing some distress in our relationship and i really dont understand how we are supposed to be able to produce bank statements from so long ago.  We have shown the money in the same account since when it was last changed in 2016 but i dont believe we can product the original transfer in 2008.Can anyone suggest what we can do next?

Solicitors have a legal duty under anti-money laundering rules, unfortunately the rules themselves are vague and so it's down to individual firms on how they should be interpreted. Clearly some will be willing to run the risk of massive fines for not doing appropriate checks and others will want to go full belts, braces and superglue to ensure they won't be accused of failing. 

Personally dont think there is much harm in them asking and given the timescales involved its doesnt feel like a massive thing to me for you to return to them saying you've asked but they are no longer available. The real test is how they respond to that. 

Your ultimate decision is to move to another solicitor but "how weak are your AML processes" are probably not how you want to go about selecting a replacement solicitor firm, you will incur additional costs switching and you may find the new firm take an even tougher line than the original firm

Whilst I generally agree and often those complaining about AML rules on here are normally the ones being unreasonable, I do think sometimes solicitors often seem to lose the plot when it comes to asking for evidence, some appear to have been sniffing the superglue!

I do think that there needs to be better guidance on how the AML rules are enforced, leaving it open to each solicitor to interpret based on how rational or neurotic they are does not seem to work. I remember the utter frustration of dealing with mine when I bought, first they wanted three months, then six, then a year, then three years (at that point I gave them five years, as well as the ten years tax returns they had already had a bundle from my accountant), then they decided they wanted ten years. I told them that I had given them five when they asked for three because that was as far as I could go back online and anything longer required a special request and a delay, they said they wanted ten. I put the request in to the bank which I was told up to 60 days and put in a complaint with the solicitors that they were being unreasonable. In the end I got the bank statements after a few weeks and they then said that they wanted twelve years, I phoned and spoke to a senior partner and had an argument with him, did they want to do their job or did they want me to take them to the Legal Ombudsman. The senior partner tried to claim I was being unreasonable in threatening to take them to the ombudsman (probably because of the fee they would be charged), however the next day after "reviewing my bank statements" miraculously decided that a decade of bank statements was enough. All in more than a month of delays because they firstly did not ask for what they wanted at the start and then continued to be neurotic throughout the process. 

Agree, this system isn't really functional. 
Solicitors shouldn't advertise based on the simplicity of their AML checks, because then it'd be a race to the bottom and fraudsters would seek the most lax ones. But then a genuine customer doesnt' know until they're in contract and half way through, meaning a solicitor could get a fixed fee and then have ridiculous demands, until the customer leaves, having to pay the fee again to another solicitor.

Few potential solutions, though someone more informed may be able to pick holes in this: 

1) Regulation should give more specific guidelines or case studies of what a reasonable check might be, eg £1mil, with 7 years of docs, tracing back the dates of each transaction showing its been held for 7+ years , with probate showing inheritance 20 years ago. £30k with 2 years of docs, showing its been steadily growing by less than the person's monthly salary.. 
It can never be exhaustive and has to allow for the solicitor to go beyond that if they suspect something out of the ordinary. But it might stop arbitrary lengths of history. 
 
2)  AML checks should be discrete pieces of work that you can go to any solicitor for similar to ID checks. The AML solicitor could then give a certificate / undertaking / something to say <I have checked AML for the source of £100k held by Mr ABC> which can then be passed on to your conveyancing solicitor. That way its only the AML checks that have to be re-done and the conveyancing can continue without having to be repeated. 

TBG01

housebuyer143 said:

Olinda99 said:

In my humble view it is ridiculous asking for statements going back that far.

say they are not available and if they continue to demand them raise a complaint with the solicitor via their complaints procedure

This! My friend had a similar issue and they wanted her bank statements for all of her accounts going back 10 years and she just couldn't produce them. She had to call the bank who would put it in the post and then wait 2 weeks and then they wouldn't send the correct things and she would have to try again. She almost lost the house because that was the only thing holding up the sale and the seller thought she was messing them around 

She put a complaint in and suddenly they didn't need any of these statements and the last 6 months was fine 

Because it likely got put to the head of compliance or MLRO officer. No solicitor is just going to just waive through source of funds at the threat of a complaint.

I'm not saying this is the case with OP, but I always get the impression that people would rather spend time complaining to and looking for sympathy from strangers on the Internet over spending time explaining to their solicitor why they cant provide such and such.

Source of funds are looked at on case by case basis, and most solicitors will understand if you can't provide such and such if you can explain or show why.

On the other hand being confrontational, obstructive or unwilling to help is going to raise major red flags. 

housebuyer143

TBG01 said:

housebuyer143 said:

Olinda99 said:

In my humble view it is ridiculous asking for statements going back that far.

say they are not available and if they continue to demand them raise a complaint with the solicitor via their complaints procedure

This! My friend had a similar issue and they wanted her bank statements for all of her accounts going back 10 years and she just couldn't produce them. She had to call the bank who would put it in the post and then wait 2 weeks and then they wouldn't send the correct things and she would have to try again. She almost lost the house because that was the only thing holding up the sale and the seller thought she was messing them around 

She put a complaint in and suddenly they didn't need any of these statements and the last 6 months was fine 

Because it likely got put to the head of compliance or MLRO officer. No solicitor is just going to just waive through source of funds at the threat of a complaint.

I'm not saying this is the case with OP, but I always get the impression that people would rather spend time complaining to and looking for sympathy from strangers on the Internet over spending time explaining to their solicitor why they cant provide such and such.

Source of funds are looked at on case by case basis, and most solicitors will understand if you can't provide such and such if you can explain or show why.

On the other hand being confrontational, obstructive or unwilling to help is going to raise major red flags. 

What I meant is, she complained and it probably went to someone senior who decided the junior was being too onorous. Of course they wouldn't just let a dodgy money launderer get away with it because they complained. It was all from savings, it's quite unreasonable to expect someone to get 6 years worth of statements from all their accounts? 
I have only ever been asked for 6 months.