How Estate Agency Can Avoid Falling Foul to Fraud by Obtaining Homebuyer ID Checks

Surprisingly, nearly 25% of homebuyers in the UK were able to purchase a property without the need for proper ID checks.

A survey for homebuyers in the UK asked whether their estate agents had required any form(s) of ID, whether it be a passport, driving licence or other relevant documentation. The source, Credas, found that more than 20% of respondents were given permission by their agency to proceed with a purchase despite being unable to provide evidence of their identity. Around 12% said that they were not asked to verify their identity by their legal team once they had put in an offer, while a further 18% were able to skip the ID verification step altogether via their mortgage brokers. 

Tim Barnett, CEO of Credas, says ‘the vast majority of those operating within the property industry failing to verify the identity of a potential buyer may sound unbelievable. Not only is there a legal requirement to do so, but it can also be incredibly detrimental should they fall foul of criminal activity. Unfortunately, it does happen more often than you may think, particularly for those attempting to verify a vast number of buyers on a manual basis.’

‘This is almost certainly an oversight due to stretched resources’ he goes on to say, ‘rather than a cavalier attitude on the part of property industry professionals. However, it does demonstrate the value that can be gained from a professional approach, whereby one identity verification can then be used across every area of the transaction process and by multiple shareholders such as agents, solicitors and mortgage brokers. It also highlights the value of investing in a bonafide onboarding platform that will prevent any transaction from progressing should a buyer’s identity not be properly verified. Not only does this approach save time, money and resources, but it reduces the chance for criminal entities to utilise the industry to launder their ill-gotten gains.’
Despite these alarming statistics, 77% of those who responded claimed that they were asked for checks, but said that they did not need a passport to do this. Council tax or other utility bills worked just as well. Carrying out identification checks is straightforward - there are various methods by which an end result can be achieved. One method of ID verification is through Knowledge Based Verification (KBV), where respondents are asked questions based on personal information from their banking transactions and creditors. 

‘Credas provides a simple, quick, and secure set of digital tools to gather the data required to verify someone’s identity using biometric facial recognition and run due diligence checks in real-time. Our customers include Connells, Purplebricks, Strike, Minerva, DigitalMove, IAMPROPERTY, Lifetime Legal and DezRez to name just a few.’ Credas therefore could be a usable solution for agencies who are opting out of identification checks due to viewing them as burdensome.