The FCA is to implement new anti-money laundering measures on Post Office transactions amid signs that hundreds of millions of pounds could be laundered annually through the network.
The regulator says it is taking steps to tackle the risk of money laundering via the Post Office, particularly in relation to cash transactions.
The regulator is working with the National Economic Crime Centre (NECC), industry and government to “strengthen controls” but says it wants “legitimate customers” to be able to continue to use the Post Office for everyday banking.
The new measures will particularly affect cash deposits with cash deposit limits at the Post Office cut to below £20,000 per transaction.
Among the FCA measures are:
- A move towards card-based transactions and away from paying-in slips to allow enhanced monitoring
- Upskilling staff to spot patterns of suspicious activity
- Enhancing monitoring capabilities in banks which allow them to identify suspicious activity
- Reducing cash deposit limits at the Post Office, subject to customer arrangements, to below the existing limit of £20,000 per transaction
- Reducing the time taken to submit Suspicious Activity Reports to the National Crime Agency (NCA)
- Improving intelligence sharing so that information is passed on to other firms, law enforcement and the FCA on a regular basis
FCA research found that 6% of adults in the UK used cash to pay for everything over the 12 months from May 2021, with this figure increasing (9%) for those in vulnerable circumstances. The FCA says it will be striving to ensure that people who wish to use cash for everyday spending were not obstructed.
Sheldon Mills, executive director of consumers and competition at the FCA, said: “‘We have worked in partnership with law enforcement, industry and government partners to ensure people and businesses can still draw on the vital cash banking services provided by the Post Office, while addressing gaps that criminals could abuse.
“This important work is part of the FCA’s three-year strategy on reducing financial crime and increasing consumer protection.”
The FCA says that, according to NECC estimates, hundreds of millions are laundered each year through the cash deposit channel at the Post Office. It adds that while banks have made good progress in improving safeguards, including a 43% drop in the time taken to report suspicious activity at Post Offices, there is still more to do.
The FCA says it will also test the safeguards put in place to consider whether firms have taken steps to protect access to cash at the Post Office for legitimate customers.
