Why is our solicitor so unreasonable and intrusive?

[Alexiaa]

Hello,

I think I'm posting in a wrong section but I really need as many answers as possible.. So... Me and my partner are buying a house in Scotland. Offer accepted, mortgage offer received, purchase should be completed after 5 days. However… Last Friday our solicitor asked for bank statements showing the money with which we will fund our purchase. We sent them to him, and now he is having a problem with a credit to my account made at the end of July. The credit is 2500 pounds. This money originally came from my partner’s uncle who lives in the USA. So the uncle sent the dollars to my partner’s brother, my partner’s brother then sent it to my partner, my partner converted dollars to pounds and then sent them to me. Here are my questions:

1. The dollars were originally a birthday gift for my partner; after receiving it we went on holiday and spent about 2000 pounds already, so just a small portion of this money is now left. We can very easily fund our purchase even without the uncle’s money because we have nearly a six-figure sum in savings. We have explained everything to our solicitor, we said like ‘we have lots of savings, these couple thousands do not even matter, we were never going to fund our purchase with it, it was for holidays…’ but the solicitor kind of refused to hear it and asked to see my partner’s bank statement showing him sending the money to me and his brother sending the money to him. He also asked to see brother’s bank statement and requested that his brother signed a gifting paper. Also, the solicitor was even upset as to 'why we waited until the last minute to inform him about receiving any gifts.' But it has nothing to do with the purchase, come on... :(

1. My partner’s brother provided his bank statement and signed gifting papers; what would have happened if he had point blank refused? Also, he originally received the money from the uncle living in the USA, so will the uncle have to sign gifting papers even though he never sent anything to my partner directly? Is this money legally a gift from the uncle or from my partner’s brother? Tomorrow is Monday, so the solicitor will be open and we don't know what to expect.

1. Our completion date is September 9th and the uncle is not in the USA at the moment, so he cannot go to a lawyer there and sign anything; he is flying back home only September 25th. What will happen if we are asked to provide any documents from the uncle but are unable to? The uncle is old and has never used any online banking, he just has a couple cards; if he wants statements, he must go to a branch to get them printed, and now it is impossible of course.

It is very normal for one family member to senda gift to one who then sends it to others and perfectly lawful but you would need to explain it. Often the very kin d person making the gift only wants to do one transfer and if you make them do 10 to each family member they might not even make the gift at all!

Yes its completely the norm for families split across borders, its not just less hassle for the sender but also cheaper in transaction costs usually. I'd imagine most solicitors in this line of work would be familiar with the model, its not red flag unless there is no matching explanation and gifting confirmations forthcoming.

However it does seem very late to be picking this up (or maybe its the Scottish timelines being different). When my DC have been buying in recent years they were warned at the outside that bank statements with supporting evidence for sources of any significant transactions would be needed so there was no risk to delays down the line.

Funny how "money laundering" only catches the little man. Not the oligarchs who have bought up London with money from goodness knows where and what.

Colour me cynical.

Just remember that solicitors are NOT your friends.

They may smile and greet you, but the clock starts running the moment you enter the room.

Kerrrchiiing!!!

It is very normal for one family member to senda gift to one who then sends it to others and perfectly lawful but you would need to explain it. Often the very kin d person making the gift only wants to do one transfer and if you make them do 10 to each family member they might not even make the gift at all!

Yes its completely the norm for families split across borders, its not just less hassle for the sender but also cheaper in transaction costs usually. I'd imagine most solicitors in this line of work would be familiar with the model, its not red flag unless there is no matching explanation and gifting confirmations forthcoming.

Solicitor here. Almost everyone has access to online banking. It's not difficult to pay money direct to the actual, intended recipient. I'm a compliance officer for my firm and this is a red flag.

Oh bore off. No solicitor wants to have to go through the palaver of verifying complicated sources of funds but we have to and attitudes like yours and the OP's (why do I have to do this??) don't help.

its just bad timing if this happens next month noone would say anything but its shown up a large amount coming from an unverified source they have to check it

What’s happening to the money sounds extremely odd. There’s no need for it to go through all those accounts. It’s a massive red flag for a solicitor.

Goodness I just had to show a statement with the money and say where is was from. 'Savings' 'sale of property' 'liquidation of investments' were good enough. I didn't have to get anything signed or show further paperwork.

mondaytosunday your money wasn't bouncing around different bank accounts. That's the red flag that the solicitor is quite rightly querying.

I think the odds of a Scottish property conveyancing solicitor suspecting/catching out US tax fraud over a one-off 2500 transfer are less than zero. It's just a routine process, possibly highlighted by the circuitous route the 2500 seems to have taken.

I read the OP again. I am not sure why the solicitor is so fixated on the 2500 credit when you have made it clear that you can very easily fund our purchase even without the uncle’s money because almost six-figures in savings.

The 2500 must be a drop in the ocean. I don't think that this solicitor is taking an appropriate risk-based approach, if it is clear from your salary and income that you can afford the deposit.

blueshoes money being transferred quickly around bank accounts is a classic marker for money laundering; for which there are draconian penalties, both for the people doing the laundering and the people facilitating it. The solicitor is obliged to check where the funds come from.

Because the way this transaction was handled looks dodgy as fuck. Even I'm hearing alarm bells for money laundering and I work in a shop so only have basic training on how to spot it.

They HAVE to check thoroughly and report any suspicious transactions and on the surface your transaction looks very suspicious.

Totally standard OP. Especially with money crossing borders through different currencies.

If it makes you feel any better, I got an inheritance midway through the first term of my mortgage, overpaid max amount each year, put the rest in premium bonds. When it came to remortgage I used the premium bond money to overpay properly.

Sold premium bond cash which went to my current account, put it in a savings account with a different bank to get a few weeks interest before remortgage was due, transferred it a bank account I happened to have with the remortgage provider in a misguided attempt to show I had the cash ready to roll... Only to fall foul of money laundering regs

I had to prove source of funds then that each gift was above board each time... with complete paper trial, including at one point being asked to sign a letter to confirm I had sent the money from me to myself! My solicitor thought I was bonkers. A faff but it was all above board so no issues.

Further to what I said above, this is an extract from the legal sector guidance which applies to solicitors supervised by the Law Society of Scotland:

"6.17.2.1 Establishing Source of Funds:
...
In circumstances where a client declares that they have been given funds for a transaction from a third party you (i.e. solicitor) may wish to record information relating to that original transaction too.

You may verify this by requesting bank statements and other relevant documentation relating to this transfer.

[Source of Funds] can often be difficult to determine without some understanding of the source of wealth of the individual. This can particularly be the case where the funds for a transaction have become mixed with other funds in an account. Here, to understand the SoF, you may need to have an awareness of the [Source of Wealth] of the individual, although your level of confidence in the source of wealth in such a case, should be considered on a risk-based approach."

Personally, I think the solicitor is missing the wood from the trees and creating a rod for her own back and her client's back (particularly at this late stage of the transaction) if it is clear that the OP can afford the deposit independently of the 2,500. She should ask what the deposit relates to but it is in her discretion, on a risk-based approach, to relax the requirement for evidence since OP is not relying on that deposit. The solicitor is not a detective trying to spot crime thousands of miles away in the US for an individual who is not even her client.

This is just my opinion, of course.

Those calling for a detailed investigation of the OP's uncle will be grateful that the ML regulations take a proportionate risk-based approach otherwise I assume they will equally be understanding if their own solicitor turns the interrogation spotlight on their finances.

Silly to take offence OP, you are paying a Solicitor to do a job which can have serious financial repercussions, so really do want them to do a thorough job following ALL the legal requirements!

Those calling for a detailed investigation of the OP's uncle will be grateful that the ML regulations take a proportionate risk-based approach otherwise I assume they will equally be understanding if their own solicitor turns the interrogation spotlight on their finances

If the alternative is at the very least having my bank account blocked for months while the bank conducts ML investigations and at the most 14 years in prison they can investigate what they want. What you call 'an interrogation spotlight' a lot of us are calling 'solicitor doing her job.'

There are also fees to pay on each transaction and not everyone in every country does have access to online banking, particularly when its older family members sending the gifts. Sometimes also older relatives simply want one member of the family to look after it for them.

I'm astonished that you have not come across this.

She is doing her job. Not denying that she has to and is. But it is the way she is doing it that is not reasonable because she is not taking a proportionate risk-based approach. She should ask what the funds relate to and if the explanation is reasonable (I think it is), then record it and ask the OP what evidence is feasible and again keep it in her records.

I am not sure why people are up in arms trying to spot ML. Yes, there are red flags in the way the money was transferred (but inter-family transfers often are convoluted because people don't run their personal bank accounts the way companies do) which puts the solicitor under a duty to enquire. But if the OP can afford the deposit without the gifts, taking a step back and looking at the bigger picture, how can the OP be facilitating money laundering by her uncle (supposedly) if she did not need the money in the first place and her account was only passively receiving the 2,500.

Again, from a big picture point of view, 2,500 is a trifling amount in the world of organised crime. Money launderers will wash millions at a go, not bother with transfers of such small amounts between family members over a period of time.

I have come across it and you'll need a good explanation before I accept funds which have gone through the number of accounts mentioned on here.

I'm also not convinced by all these older people who can't do online banking.

My understanding is that the solicitor saw a transaction of incoming funds to OP's account, which was a partial transfer of incoming funds from her partner's account, in which the currency had been converted. This has nothing to do with investigating the OP's uncle-in-law and everything to do with making sure the solicitor has done due diligence in making sure they're not aiding a transaction in which money laundering was involved. And, yes, I fully expect my own solicitor to turn the exact same spotlight on my finances when conducting major purchases, particularly as we are American, resident in the UK so regularly convert currency. We expect to jump through hoops even when the transfers in question are between our own accounts.

The solicitor is not a detective trying to spot crime thousands of miles away in the US for an individual who is not even her client.

well tell me that you don't understand the money laundering and proceeds of crime legislation without telling me you don't understand etc, etc.

Again, from a big picture point of view, 2,500 is a trifling amount in the world of organised crime

When I was doing my compulsory money laundering training, we were told to look out for the ones that came just under deposit limits. It's not just organised crime and cartels who launder money.

Those calling for a detailed investigation of the OP's uncle will be grateful that the ML regulations take a proportionate risk-based approach otherwise I assume they will equally be understanding if their own solicitor turns the interrogation spotlight on their finances.

No one is calling for a detailed investigation, we're only pointing out why it has piqued the interest/concern of the solicitor. It's an unusual set of financial circumstances.

So what is the solicitor supposed to do if the OP's explanation is that the uncle just has pension, some disability payouts and savings.

Does she have to investigate what pension or payouts he is entitled to under US laws of the state he is in and figure out whether it exceeds 2,500. She does not practice law in the US and it will cost her to get that advice from a US lawyer. Of course if the OP said something which suggests that the uncle was evading taxes or claiming fraudulently, then the solicitor would ask further.

Other than that, just the explanation on face value seems reasonable.

This is what I meant that "the solicitor is not a detective trying to spot crime thousands of miles away in the US for an individual who is not even her client". It is not to turn a blind eye. She has to act on reasonable suspicion but she is not required to go to the ends of the earth to satisfy herself that the uncle's funds are legitimate.