Proof of Funds - old savings. Is PoF a system that Martin needs to look at.

artyboy

silvercar said:

jnorth55 said:

Elliott.T123 said:

I have bought multiple houses with large amounts of cash, some coming as a gift from others, some coming as an inheritance and some from a sale of a partners house.

Every single time with 3 different solicitors a bank statement showing the funds in an account for 6 months has been enough evidence.

Either:
1. You are the unluckiest person ever and have managed to find the most picky solicitors in the country
2. There is something about your situation that flags with solicitors making you high risk (I know you have said there isn't but there may be something you are missing)

The system works fine for 99% of people you show a bank statement showing the funds have been in there for a while and everyone is happy and moves on.

Get a recommendation from a friend or family member who has moved house and used a solicitor that didn't require 30 years of paperwork and use them.

Apologies for venting in reply to your comment, but I am frustrated with the replies that don't seem to understand what has been said. I am not talking about solicitors thinking there is something to flag, simply that they ask for proof of source of funds & when I, & lots of others, say the money is from decades ago & they don't have pay slips or whatever the solicitors won't budge, even though the rules clearly allow them the leeway to take a more nuanced approach & use other ways to establish good standing etc. 
This issue isn't only about my situation, there are lots of similar stories simply because the guidance is based on the idea that solicitors will have an understanding of how saving can build up & we are increasingly in a situation where to have any savings of note is less normal & to have enough to buy without a mortgage is something I've found some solicitors automatically think is odd unless you happen to be very, very wealthy.

So we said accumulation of many years of savings and the solicitors were happy with that. Sizeable deposits in 2 cases with a different solicitor in each. This was for gifted deposits for our kids buying their first home. The solicitors were more concerned that we had had independent legal advice to understand that a gift was a gift. Proof of funds was a savings account linked to our mortgage, that had genuinely been saved for over many years. When it came to transferring the deposits, we transferred directly to the solicitors’ client accounts, they were happy as long as they came from accounts in our name. This was in 2022 and again in 2024, so fairly recent.

Exactly our experience (except that Mrs Arty and I were buying the entire property for our youngest). 

It would have been nigh on impossible to directly prove the provenance of the specific funds that came from our accounts - it was a mixture of savings from employment, investment sales, work share scheme proceeds etc, over many years.

But the solicitor we used was using a third party ID and SoF verification service and it went through without them batting an eyelid. Possibly it helped that as part of the process you needed to give them access to your bank account transactions through Open banking protocols - not something I know everyone is happy with. But it probably demonstrated that our regular income and expenditure didn't make this transaction anything wildly out of the ordinary.

Ultimately the SoF/SoW rules are intentionally written this way because anything too prescriptive, and the real criminals would just work around it. It does sounds like the OP has just been very unlucky with solicitors that are taking their checks too far.

silvercar

It does sounds like the OP has just been very unlucky with solicitors that are taking their checks too far.

I think this is the key. Use a property solicitor in an affluent area and they will be well used to accumulated large deposits. Do the same with a cheap conveyancer based somewhere less affluent and not only will the size of the deposit raise eyebrows but if they are not used to high deposits, they will worry more about being able to demonstrate that they followed all requirements to the letter and therefore be over demanding in their requirements. 

There may also be some stereotyping going on. Tattooed, two teeth Jim with a parrot on his shoulder, profession - pirate, may have to justify his pot of gold to a far greater degree than the middle aged man in a suit, profession - pilot, even if both funds come from a major bank’s savings account. 

user1977

fistfulofsteel said:

I'm considering DIY conveyancing to get around this issue. 

How would that get around it? The seller's solicitor is likely to be even more wary about accepting funds from an unrepresented buyer - if they agree to deal with it at all, you're still going to have to demonstrate where the money came from.

EssexHebridean

the firm I work for does mostly conveyancing, and as a result we see a fair number of folk over a year who need to be vetted for AML and proof of funds. It's INCREDIBLY rare that anything beyond 6 months bank statements to prove savings is required - even for a cash purchase Occasionally when a lender is involved they want a little more in depth info, but even then it's rarely more than an extra 6 months proof of income and additional time back on savings statements. Very occasionally something comes up where things don't add up for whatever reason, and then more questions will be asked, but it happens so rarely I honestly can't recall the last time we had that sort of issue. In the 16 years I've been here, I think I can remember two occasions when a client's own evasiveness (not saying that this is the case with the OP - purely speaking from an "on the ground" perspective) has lead to us eventually politely saying that we were not happy to continue acting. In that time I can never recall a situation where we have asked a client for "decades" of information - or indeed even "years". It simply doesn't happen in most normal circumstances. 

Solicitors are under enormous pressure these days to ensure that all AML checks are carried out and have satisfactory results - if there is anything at all that is raising red flags, it has to be looked into. 

My suggestion to the OP next time they are asked for proof of funds, is to produce 6 months statements for the account the money is held in, and say nothing more about it at all - no "trying to explain" or "adding detail" - simply the bare basics, and then to see where that leads. Sometimes, the less you say, the better the outcome.

Elliott.T123

jnorth55 said:

Elliott.T123 said:

I have bought multiple houses with large amounts of cash, some coming as a gift from others, some coming as an inheritance and some from a sale of a partners house.

Every single time with 3 different solicitors a bank statement showing the funds in an account for 6 months has been enough evidence.

Either:
1. You are the unluckiest person ever and have managed to find the most picky solicitors in the country
2. There is something about your situation that flags with solicitors making you high risk (I know you have said there isn't but there may be something you are missing)

The system works fine for 99% of people you show a bank statement showing the funds have been in there for a while and everyone is happy and moves on.

Get a recommendation from a friend or family member who has moved house and used a solicitor that didn't require 30 years of paperwork and use them.

Apologies for venting in reply to your comment, but I am frustrated with the replies that don't seem to understand what has been said. I am not talking about solicitors thinking there is something to flag, simply that they ask for proof of source of funds & when I, & lots of others, say the money is from decades ago & they don't have pay slips or whatever the solicitors won't budge, even though the rules clearly allow them the leeway to take a more nuanced approach & use other ways to establish good standing etc. 
This issue isn't only about my situation, there are lots of similar stories simply because the guidance is based on the idea that solicitors will have an understanding of how saving can build up & we are increasingly in a situation where to have any savings of note is less normal & to have enough to buy without a mortgage is something I've found some solicitors automatically think is odd unless you happen to be very, very wealthy.

I am frustrated that you don't seem to understand my reply. My argument is that this appears to be a very small problem that only a tiny minority of people face and the only reasons that they face this issue is either they are unlucky or they have a situation that requires further digging. 

Every house I have ever bought, every house my parents have bought, every house my in-laws have bought (using far bigger cash figures than you mentioned, one of the purchased was over £1m in cash) the "proof of source of funds" has been a simple case of, here is the bank account / accounts the money is in, it has been here for 12 months. That is all the proof that was required.

So my argument is that this is not a major issue and anyone facing this either needs to move to a new solicitor or if they are having the same issues with multiple then look at why they are being flagged as high risk.

You seem very fixated on the phrase "proof of source of funds" I don't know if this is because you have been told this by a solicitor or if you have decided to take it extremely literally. You are aware that to 99.9% of solicitors this doesn't actually mean that they need to trace the funds to their original source. All it means is that they need to have proof that they are confident the funds aren't coming from illegal means (mainly money laundering). 99.9% of solicitors are happy with proof that the money has been sat in an account for 6-12 months and that is enough proof. As everyone has said before. If your solicitors are asking for more than that try someone else.

user1977

Elliott.T123 said:

jnorth55 said:

Elliott.T123 said:

I have bought multiple houses with large amounts of cash, some coming as a gift from others, some coming as an inheritance and some from a sale of a partners house.

Every single time with 3 different solicitors a bank statement showing the funds in an account for 6 months has been enough evidence.

Either:
1. You are the unluckiest person ever and have managed to find the most picky solicitors in the country
2. There is something about your situation that flags with solicitors making you high risk (I know you have said there isn't but there may be something you are missing)

The system works fine for 99% of people you show a bank statement showing the funds have been in there for a while and everyone is happy and moves on.

Get a recommendation from a friend or family member who has moved house and used a solicitor that didn't require 30 years of paperwork and use them.

Apologies for venting in reply to your comment, but I am frustrated with the replies that don't seem to understand what has been said. I am not talking about solicitors thinking there is something to flag, simply that they ask for proof of source of funds & when I, & lots of others, say the money is from decades ago & they don't have pay slips or whatever the solicitors won't budge, even though the rules clearly allow them the leeway to take a more nuanced approach & use other ways to establish good standing etc. 
This issue isn't only about my situation, there are lots of similar stories simply because the guidance is based on the idea that solicitors will have an understanding of how saving can build up & we are increasingly in a situation where to have any savings of note is less normal & to have enough to buy without a mortgage is something I've found some solicitors automatically think is odd unless you happen to be very, very wealthy.

this doesn't actually mean that they need to trace the funds to their original source.

Which of course would be impossible anyway given the original source would be "when mankind invented money". Everyone has to draw a line somewhere!

jnorth55

user1977 said:

jnorth55 said:

user1977 said:

jnorth55 said:

user1977 said:

jnorth55 said:

user1977 said:

jnorth55 said:

user1977 said:

jnorth55 said:

Can I ask the people who are replying with 'I don't believe this' or 'Is there anything else going on' to try something; simply, for a minute, accept that what I've said is honest & there's nothing else going on. If you do that you might understand that there is a problem with the system because if anyone is asked for a bank statement or wage slip from more than 10 or 20 years ago it is almost impossible to get a copy & as I mentioned already, the advice used to be to not keep such documents for more than a few years. 

But some of us have professional involvement in the "system" and it isn't ringing any bells as a typical issue. It's utterly routine for six-figure sums to be produced to solicitors for purchases (often from "the bank of mum & dad"), and it would be ridiculous for solicitors to be expecting proof of funds going back decades. So while I don't particularly doubt the veracity of what you're saying here, it sounds very very odd and doesn't demonstrate a general problem with the "system".

Given that it can cause delays also, especially if a buyer has to try different solicitors, wuldn't it be an idea to have a system that someone could use to go through the checks before putting a bid in or getting a solicitor involved. 

There's nothing stopping you from checking upfront with solicitors what they'll need. Obviously there's a risk that might itself arouse suspicion, but generally I would expect them to give you a good idea of what evidence they'll require.

I'm not talking about that. Anyone can establish what kind of proof might be requested & should so they can prepare. What I'm talking about is a way for the checks to be done without having to go through the process of getting one solicitor after another involved. A centralised system where all the proof someone has is submitted & any clarification sought if needed & then a certificate of proof is given. 

All that's likely to do is push up the costs for everyone, as well as slow things down for the vast majority of cases where there isn't any significant enquiry required.

if there was an online system that, at least, checked the information held by various official departments & banking to verify some level of stable standing it should take minutes & not cost much at all.

Who's setting that up and at what cost?

Bear in mind that many financial institutions have enough trouble getting their own legacy systems talking to each other, never mind creating some online way to extract current and past accounts from everywhere (and verify that it's the same jnorth55 who held all those accounts and is the same one the current enquiry is about).

No one would need to as it already exists. Its the same system that solicitors use to do the checks & also is used by credit checking companies & indeed other sections of the financial industry.

No, there are online products that can verify your ID (which are frequently used by solicitors for that purpose) and tell prospective creditors what your credit history is like - there's nothing which is going to verify where the funds in your savings accounts came from.

This kind of shows the issue; what can honest people do if through no fault of their own they no longer have the documents showing where funds came from? With myself it's simply down to the length of time I've had some of them, but it doesn't take much to think of other reasons. Putting my own situation aside are we really not able to think of a system that ensures non-honest folks are affected but not others? 

jnorth55

SiliconChip said:

jnorth55 said:

Elliott.T123 said:

I have bought multiple houses with large amounts of cash, some coming as a gift from others, some coming as an inheritance and some from a sale of a partners house.

Every single time with 3 different solicitors a bank statement showing the funds in an account for 6 months has been enough evidence.

Either:
1. You are the unluckiest person ever and have managed to find the most picky solicitors in the country
2. There is something about your situation that flags with solicitors making you high risk (I know you have said there isn't but there may be something you are missing)

The system works fine for 99% of people you show a bank statement showing the funds have been in there for a while and everyone is happy and moves on.

Get a recommendation from a friend or family member who has moved house and used a solicitor that didn't require 30 years of paperwork and use them.

This issue isn't only about my situation, there are lots of similar stories...

You keep repeating this but everyone else on the thread is telling you that it's not something that's happening to most people. I'm sure you have found other people who have experienced the same issue as you, but nobody else here thinks that it's a widespread issue, as shown by the fact that the vast majority of people are able to succeed in purchasing a property. I'd ask some other solicitors what their procedures are and pick one who doesn't require such onerous checks.

I get what you are saying but surely the number of people affected isn't something you know, or indeed I know. Im just aware, having being dealing with it for a number of years & with talking to other folks & solicitors themselves, that it is an issue & one that is increasing because of the shift to digital banking. Most of the issues solicitors have mentioned to me is around that fact that the checks came in in 2017, which isn't that long ago & sometimes they know their clients & think everything is ok, but some random online conveyancing company just say 'no' in a 'computer says no' way. 

artyboy

EssexHebridean said:

the firm I work for does mostly conveyancing, and as a result we see a fair number of folk over a year who need to be vetted for AML and proof of funds. It's INCREDIBLY rare that anything beyond 6 months bank statements to prove savings is required - even for a cash purchase Occasionally when a lender is involved they want a little more in depth info, but even then it's rarely more than an extra 6 months proof of income and additional time back on savings statements. Very occasionally something comes up where things don't add up for whatever reason, and then more questions will be asked, but it happens so rarely I honestly can't recall the last time we had that sort of issue. In the 16 years I've been here, I think I can remember two occasions when a client's own evasiveness (not saying that this is the case with the OP - purely speaking from an "on the ground" perspective) has lead to us eventually politely saying that we were not happy to continue acting. In that time I can never recall a situation where we have asked a client for "decades" of information - or indeed even "years". It simply doesn't happen in most normal circumstances. 

Solicitors are under enormous pressure these days to ensure that all AML checks are carried out and have satisfactory results - if there is anything at all that is raising red flags, it has to be looked into. 

My suggestion to the OP next time they are asked for proof of funds, is to produce 6 months statements for the account the money is held in, and say nothing more about it at all - no "trying to explain" or "adding detail" - simply the bare basics, and then to see where that leads. Sometimes, the less you say, the better the outcome.

**Puts Anorak On**

At the risk of being pedantic, PROOF of funds is the easy part, i.e. establishing that the money for the transaction is available in an account somewhere.

SOURCE of funds is the side where you have to establish an ultimate link back to a legitimate money source.

Apologies if that's more detail than needed here, but it's my professional area, and they are distinct concepts for AML checks (There's also Source of Wealth, but it doesn't really come into play for a single transaction relationship like this...)

jnorth55

Herzlos said:

jnorth55 said:

Herzlos said:

Since this came up 5 years ago, I'm assuming that you kept bank statements since to show that the money in your savings has been there for at least 5 years now? Are they saying that is insuffient and they need you to prove that you were paid it by a now-defunct company from the 80's? 

Is there anything unusual about where the money is? It's too old for Crypto, but is it offshore or in some unconventional saving/investment mechanism?

It seems pretty unreasonable they'd need to go back further than records are kept (6 years) for something as mundane as, say, £100k in an ISA or Premium Bonds. 

I have explained all this already. I have statements etc. going back lots of years, 10+ for example & all the savings are in standard bank savings accounts. The problem, as already explained a number of times, is 'proof of source of funds' when its to do with the savings from decades ago. 
I didn't mention £100k but I did say that this is about buying a property with cash, so it is more than that. 

What I mean is that it's relatively normal for folk to have savings accounts with more than £100k in them for more than 10 years. That in itself doesn't seem odd. 

What may be odd if you had, for arguments sake, £100m in a South American savings account that you were trying to use to buy a house in the UK. 

You're being very cagey about details and drip-feeding, so we've got a lot of gaps to fill in. All we know is that you've got between £100-400k in savings account(s) that were earned 30+ years ago, and paperwork going back at least 10 years. That all sounds completely normal and wouldn't cause the kind of scrutiny you're seeing. 

As alluded to earlier, and as people have mentioned that normally to provide simialr figures to yours they've only needed evidence that it's been in savings for a while. It's very unusual for anyone to need to provide proof of payment from 40 years ago. I'd go so far as to say it'd be unusual for anyone to have any paper trail more than about 10 years old.

What we're trying to figure out is if there's something you're not noticing or telling us that's causing it to flag up as suspicious. 

Going back to your previous post, to see if we can pick anything out of it:

"I'm in my 60's & worked in an industry at quite a high level for a shop chain & then another part of the industry through the 80's & 90's - both companies that haven't existed for a long time now. I then ran my own business in the same industry & was saving to try to buy a house without a mortgage. I then had a bereavement which meant I inherited a house & to be honest I thought I'd live there for rest of my time.

So, basically I have savings going back more than 20 / 30 years, long before the AML checks came in in 2017 & whilst I have the most recent few years records of transferring accounts etc. I didn't keep older records after the usual 6 years thing.

Conveyancers keep telling me that as I can't provide proof of, for example, wage payments decades ago that's a problem. Likewise I sold off a lot of personal possessions a few years ago & can't provide proof of all of those transactions as it wasn't done via Ebay etc. (specialist collectors items etc)."

Why would they care about any of that? Did you have an exceptionally high income in any of the jobs?

How much are you talking about having sold the specialist collectors items for?

I'm not 'drip-feeding' at all, or being cagey. I'm obviously not go into detail about my finances on a public forum more than needed, but my initial post explained the situation. What I didn't do was assume that some people would think there must be something 'odd' going on with me. In a way the suggestion that there might be something odd shows the problem. I, or anyone, can be a person of good standing, never had any issues with finances etc & find that they are being asked to prove where savings came from that they've had for decades simply because someone assumes that might be odd. That's one of the issues with my initial question; isn't it possible to have a system that is designed to weed out the non-honest but doesn't result in situations like the one I have had & others have also. 

So, if you say 'is there something else going on...' you tell me how I can prove there isn't? Isn't that the issue? It's possible, with enough checking, to prove there are issues with someones finances, but, if someone is asked to go back beyond when they've kept documents up to, it's hard to prove there aren't any. 

'Did you have exceptionally high income in any of the jobs?' - putting aside that there aren't any guidelines to define what that means, I would say not. We just saved very hard & worked very hard. Why should it matter anyway, in the context of the process we're discussing. 

In terms of the items I've sold, I had a very large collection of memorabilia from a certain decade & sold it mostly to other collectors. Again 'how much' is subjective & shouldn't matter in this discussion. I guess some people would think its a lot & others, especially who know about the items, would think it was average. No item was more than the limit before you pay tax.