Crackdown aims to stop millions of pounds being laundered via Post Offices

TOUGHER safeguards to reduce the risk of money laundering via the Post Office have been set out by the City regulator.

The Financial Conduct Authority (FCA) has brought together agencies including the National Economic Crime Centre (NECC), banks and the Post Office, to address an identified weakness in anti-money laundering controls relating to cash deposits. The Post Office has been helping to fill in cash access gaps for people and businesses as more bank branches shut.

Meanwhile many banks offer personal and business customers a range of banking services, including cash deposit services, through the Post Office.

But the NECC estimates that hundreds of millions of pounds is laundered each year through the cash deposit channel at the Post Office.

The steps set out for banks under the crackdown include a move towards card-based transactions and away from paying-in slips, where possible, to allow enhanced monitoring and reduce opportunities for deposits being made into accounts by third parties.

The sharing of intelligence will also be improved under the plans, so that information is passed on to other firms, law enforcement and the FCA on a regular basis.

Staff will also be trained to spot patterns of suspect activity and cash deposit limits at the Post Office will be reduced, subject to customer arrangements, to below the existing limit of £20,000 per transaction.

The FCA said the limit has been abused by criminals making multiple deposits of £20,000 each day to launder large amounts of cash quickly. For personal accounts, the FCA has proposed a limit of £1,000 per 24-hour period and £10,000 per 12-month period. For business accounts, the regulator has asked banks to consider adopting a tailored approach based on expected customer activity.