In today’s regulatory landscape, FINTRAC compliance is more than just a legal obligation—it’s a business imperative. Our industry has often seen compliance as a bureaucratic burden, but a well-structured FINTRAC compliance program provides significant business advantages. From reducing fraud risk to safeguarding your reputation, a proactive approach to compliance can strengthen your real estate business and foster long-term success.
One of the most immediate benefits of a strong FINTRAC compliance program is the reduction of fraud and financial crime exposure. The real estate sector is a prime target for money launderers due to high-value transactions and the ability to obscure the true ownership of properties. A weak compliance framework creates vulnerabilities that criminals can exploit, potentially using your brokerage or real estate transactions as an unwitting vehicle for illicit activities. Like it or not, the rules that FINTRAC has enacted around how to identify clients and specify “how to do things properly” (for instance, using technology to assess the validity of government ID when accepting it remotely) help ensure that deals you are involved in are not fraudulent. Indeed, if you look into almost every case of a home being listed and/or sold fraudulently, almost every single story has—at its core—a breakdown where no one verified the identity of the individual properly.
In today’s digital age, reputational damage can spread rapidly and devastate a real estate brokerage. A single news story can be amplified and pushed around your community quickly. A compliance breach or a story about fraud is exactly the kind of news people love to share—making it about real estate makes it doubly compelling. As such, the consequences of non-compliance go beyond fines; they erode credibility in the market. It is reasonable to assume that you don’t want your name as an agent associated with the listing or sale of a home that was conducted by a person who wasn’t the owner.
A real estate business known for adhering to stringent compliance standards builds a trustworthy reputation. Homebuyers, sellers, and investors prefer to work with real estate professionals who demonstrate integrity, ethical business practices, and compliance with financial regulations. By proactively implementing a FINTRAC-compliant AML program, real estate businesses signal to clients and stakeholders that they take financial crime seriously and are committed to transparency. Indeed, while many agents treat FINTRAC as a burden and express those opinions to consumers, we’ve observed that consumers generally prefer to see their agent “doing the right thing” and appreciate the professionalism implied when their agent takes their obligations (yes, including their FINTRAC ones!) seriously.
There is another element of FINTRAC that’s worthy of quick discussion, and it’s this—real estate agents are just one of many professionals required to observe and report evidence of money laundering. For context, financial institutions, securities dealers, money services businesses, life insurance companies, accounting firms, casinos, dealers of precious metals and stones, and mortgage brokerages are all reporting entities under the regulations. Interestingly, the way in which each industry reports and what they should be considering are vastly different. Even more importantly, it’s only because all of these various professionals are paying attention in their own unique ways that FINTRAC can start to get a full picture of potential money laundering.
As a reminder, money laundering is something almost all Canadians can agree is bad. When money is being laundered, it means that criminals are being rewarded for committing whatever crimes they are involved in. From fentanyl distribution, human trafficking, murder-for-hire, and many more—whenever money is successfully laundered, the criminal has achieved their objective of profiting from the crime and will therefore be incentivized to do it again. At a likely over $100 billion (with a B!) laundered in Canada annually, that’s an awful lot of crime being enabled.
Ultimately, if you’re still muttering to yourself about how unfair it is that agents are subject to FINTRAC, if you’re still taking shortcuts on properly identifying your client, or if you haven’t stopped to consider whether there is an elevated risk of money laundering in the transaction you are handling, I urge you to reconsider. It is true that the training and knowledge required to be a compliance officer and the work involved in setting up a complete FINTRAC compliance program can be daunting—but for the majority of agents reading this, FINTRAC compliance can best be summed up as: learn enough to know what you’re looking for, pay attention, and document that you’ve done what you’re supposed to do. On the other hand, if you are a compliance officer and have all the obligations and responsibilities, know that help is available!
Greg Dent
COO – ReallyTrusted
