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Estate Agency’s ‘Excessive’ Money Laundering Fine Slashed

Officialdom is not always as fair as it should be but, if you are a victim of that, the law can help you. In one case which proved the point, an estate agency which was hit with a record £170,000 fine for breaching money laundering regulations had the penalty slashed to just £5,000 by a tribunal.

The agency was struggling through the financial crisis when an Office of Fair Trading (OFT) officer visited and reported significant and widespread failings in its record keeping and systems for identifying money launderers and fraudsters. The fine represented 45 per cent of the agency’s annual profit and was 17 times larger than any previous penalty imposed on an estate agency in such a case.

In allowing the agency’s appeal, the First-tier Tribunal (FTT) variously described the penalty as ‘vastly excessive’, ‘extremely harsh’ and ‘wholly disproportionate and unjust’. The agency was experiencing very difficult trading conditions at the time, was financially stretched and was in the midst of a major reorganisation, which had involved making 45 per cent of its workforce redundant.

The FTT criticised the ‘very mechanical’ way in which the fine had been calculated after a single, brief, visit to one of the agency’s branches and a conversation with one of its managers. Its directors had been hit hard in the pocket personally and had endured very material suffering and worry over a prolonged period. The failings identified were administrative and would have been most unlikely to allow a fraudster or money launderer to proceed unchecked.