Money
Laundering Prevention
Why
must I have proof of identity?
What
is money laundering?
How
does it work?
How
will this affect me?
What
proof of identity will I need?
Is
more proof needed for a postal, telephone or Internet account?
What if I don't have the correct documents?
Can't
the bureaucracy be simplified?
Your comments
Contact details
Why do banks
and building societies ask you for proof of your identity?
Since 1994, when the Money Laundering Regulations became law,
all banks, building societies, and other businesses providing
financial services have
had to put procedures in place to stop criminals from using them to launder
their "dirty" money.
This includes the need to obtain proof of identity and address from anyone
who wishes to open an account or buy any financial product or service from
them.
What is money laundering?
Money laundering means the methods criminals use to hide and disguise the money
they make from their crimes.
The term laundering is used because criminals need to turn their "dirty" criminal
money into clean funds that they can use without arousing suspicion.
Getting it into the financial system means that it becomes harder to trace
and confiscate.
Drug traffickers, armed robbers, terrorists, burglars and those who de-fraud
members of the public all need to launder the proceeds of their crime.
What has this got to do with bank and building society accounts?
The first step in the laundering process for criminals is to get their money
into an account with a bank or building society often using a false identity
and address.
They can then transfer it to other accounts, here or abroad, or use it to buy
other goods or services.
It eventually appears to be like any legally earned money and becomes difficult
to trace back to its criminal past.
They can then spend it, or as is often the case, use it to fund more crime.
Banks and building societies are not only required by law to prevent this,
but they are determined to stop criminals who wish to use them to launder the
proceeds of their crimes.
How could this affect you?
A key defence against money laundering is to prevent accounts being opened
in false identities.
Anyone wishing to open or operate an account will therefore be asked for separate
proof of identity and address, and often date of birth.
Whatever type of account you want or what ever you want to use your account
for checks will still need to be made.
The fact that these checks are carried out does not mean that you are suspected
of money laundering.
Criminals try to appear to be normal law-abiding customers, for example they
may try to open a number of accounts using small amounts of money.
So it is necessary to make checks on everyone.
These checks will be needed who ever you open your account with - whether it
is a building society, a bank, a credit card company, or a supermarket.
A criminal could falsely use your identity if these checks are not in place.
What proof of identity will you need?
The best documents are those that are issued by an official authority, cannot
be easily forged, and include a photograph. The same document cannot be used
to prove both identity and address.
They need to check that you are who you say you are and you live where you
say you live.
Typical items asked for may be a current passport, a current full driving licence,
a pension book or benefit book, a council tax or utility bill.
However, other documents may be accepted - each bank or building society has
its own arrangements.
Some checks can also be done without asking you for proof, for instance a Electoral
Register check, but you will always be asked to provide some direct proof yourself.
Is more proof needed for a postal, telephone or Internet account?
Any application to open an account where the building society or bank does
not meet you face-to-face will need more proof of your identity and address.
By avoiding face-to-face contact with branch staff, a criminal (or an accomplice)
has less risk.
What if I can't provide the documents suggested?
There are exceptional procedures in place to help customers who cannot provide
the preferred documents.
Don't be put off by the mention of passports and driving licences.
These tend to be the documents that are preferred because they are official
documents and most people can provide them, but they are not the only way of
enabling a bank to satisfy itself of your identity.
Many people have reasonable grounds for not being able to produce the recommended
documents.
For example, they may have never been abroad, so do not have a passport; have
never learnt to drive, or their spouse pays the household bills.
To help in these cases all banks and building societies have procedures that
permit other proof of identity and address to be accepted.
Discuss with a member of staff what sort of documents you can produce. If necessary,
the member of staff can refer your application to someone who is authorised
to decide in exceptional cases.
Please remember though, the law requires that you must provide satisfactory
proof of your identity and address.
If you cannot meet these requirements, then under the law the bank or building
society must not open an account for you.
Can't the bureaucracy be simplified?
The law requires that we have satisfactory proof of your identity and address.
The proof needed may change from time to time - criminals are always looking
for new angles.
The banks and building societies will continue to work with Government to ensure
that there is sufficient flexibility within the system.
Our aim is to ensure that all genuine applicants can have access to accounts
and financial services.
You can help by thinking about the documents you can supply and by discussing
your situation with staff if you have difficulties.
Please help us to prevent crime, and the laundering of the proceeds of crime,
by being patient when staff ask you to provide documents to prove your identity
and address.
Your
Comments On Banks
Newry caller says:-
"if you want to open a bank account
in the Republic, neither a passport nor a driver’s licence
will suffice. They require a telephone bills or an electricity
bill."
Moneyreagh
caller says:-
" the Post Office, Girobank and the Alliance
and Leicester are all one company - your listener should open
an account with them.
Belfast
caller says:-
"I have been with the same bank for over 30 years and
I still had to show my passport and a bill with my name on
it, when I wanted to change my account to a different one."
A
gentleman says:-
"my daughter had a student account and was going
to upgrade
it to a proper cheque account but they wouldn’t let her
have it without the required documentation even though she already
had an account with the bank."
Lisburn caller
says: -
"If she had walked into the bank with a lottery cheque
for a million pounds, would she have been able to open account
without
any of the problems!"
Contact
details
British
Bankers' Association
Pinners Hall
105-108 Old Broad Street,
London EC2N 1EX
Tel: 020 7216 8800
Fax: 020 7216 8811
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