ING Direct Raises Savings Account Interest Rate to 4.50%

Sadly not, the DD mandate doesnt get sent to the drawee any more so the account name isnt checked against the account number.

The existence of a 'cheque' is allowable as evidence in many institutions Money Laundering Rules whereas a DD isnt.

There is the answer then, they are using the cheque as part of their ML process.

In message , Chris Blunt writes

True.

Sad indeed. But even so I'd have hoped the electronic debit request winging its way from the collecting bank to the drawee bank (is "drawee" correct where no cheque is involved? does one consider a DD as "drawn on ..."?) would contain the account name as a kind of double-check, and not just account number of drawer and amount requested. I'd also expect it to contain sort code, number, and name of the payee's account, plus some other reference code, since at least some of those will need to appear on the drawer's statement, and the rest will help to trace the transaction should the drawer be minded to query it.

You haven't really adequately explained why. If it's only the source of funds that needs to be verified, then a hand-scrawled DD mandate can be dodgy if the account details are ambiguous. But the electronic log of the actual transaction should completely identify the source account, even if it should not match the number on the mandate. What am I missing here?

"James" wrote

How would a search on Experian prove that a person who has merely mentioned that name, actually *is* that person - and not somebody else who happens to know that that person has got a good credit file? :-(

"Ronald Raygun" wrote

Ah, but what if you opened your "existing" bank account pre-ML rules? Then you wouldn't have had to prove your identity as strongly to your original bank, and so ING would be "piggy-backing" on much weaker checking ... :-(

That's their problem. In fact the account I used *is* old enough.

In message , Ronald Raygun writes

Probably not!

No. How could that be done? The chances of a DD mandate having the account name in exactly the same format as the bank is miniscule.

That a forged DD mandate with the wrong account name for the stated number could not be picked up by ING and it is their responsibility to satisfy ML regs at the outset. A Historical audit rail aint any use.

(I know a cgeque could be forged as well!)

In message , James writes

But if you type it in wrong, then there is a problem whereas the cheque is printed by the bank.,

Yes, I dont agree with the 'piggy back' theory.

It's not a theory, it's fact. But if you don't like the name, let's use a different one.

In effect the ING account isn't fully fledged.

It is, if you like, a "parasite" account because the only way of moving funds into or out of it is from/to the "host" account nominated at the outset and verified by the initial deposit cheque.

Because you can't deposit cash or cheques directly into it, you cannot launder money through it that hasn't already been laundered by the host bank.

It is an (unrecorded) IDENTITY check. It will not affrect any credit applications you make. You are right though, other than checking the details you supplied with those held by Experian I can't really see how it works: I suppose just confirming that 'you' are who say you are through the process of declaring yourself on the electroal roll, that suffices, since the act of diliberatly falsifying this info is against the law. Anyone hear about that woman registering her cow to vote! (it'll want a credit card next...)

I don't really know much about the ML regs, but at work we got a sheet of paper basically saying 'beware' of money laudering (it happens) and report it if suspicious. Although I assume the regs are much stricter for the actual implementors of a financial system, ie banks etc...

In message , James writes

No its not. It confirms residence for a named individual.

Money Laundering does not necessarily occur at a single point of launder. Laundering can occur by a series of transactions through a system of accounts produce a 'murky' audit trail.

Miniscule? I doubt it. But I'll grant you that there is a non- negligible chance of it not being exactly the same. But so what if the odd initial is missed out or added, or if there is the odd is-spelling? It only needs to catch blatant mismatches.

Why? Money Laundering rules will have been breached by even miniscule errors.

My point was that if the host bank is already protected by anti-laundering mechanisms, then the parasite bank is *automatically* protected too, by virtue of the fact that the only way in or out is via the door to the host account. Therefore any additional anti-laudering measures applied on that doorway cannot catch anything that shouldn't already have been caught on the way into the host bank, and can't be caught anyway because ING can't know that the twenty grand being transferred from my host account were originally paid into it in 20 equal batches of used tenners by BGC deposits all over the country.

That, I put to you, is why ING can get away with not requiring proof of identity as they would almost certainly be required to do if they were offering a conventional account.

So if I try to open an ING account in the name of Olive Oyl but send them a cheque from an account titled Olive J Oyle they would refuse?

The ML rules only relate to opening of an account, not to feeding it. I understand that in the case of ING they will not let you feed the account from any source other than the one nominated at the outset, and that's why I claimed they're piggybacking on the feeder bank's ML clearance. There is no money path into the ING account except from the designated feeder account, and that's why ING don't need full-fat ML screening on opening.

The reason I said I hoped the account name would accompany each DD payment request was nothing to do with satifying ML rules but with making sure the wrong account isn't debited.

Apparently you can deposit cheques directly into your ING account.

From their web site :

"You can also send cheques to us, made payable to yourself. Please write your account number on the front of the your cheque, after your name. In addition, you can transfer money electronically from an external account that is not linked to your ING Direct Savings Account."

cheques thing. I suppose it is more traceable than cash. ING must have satisfied the financial authorities in order to operate in the UK though, which suggeests that there is something wrong with those rules?

The first sentence could just mean that you can send them *your own* cheques, but the second sentence makes clear that is not the case. Traceability is still safeguarded, though, even when the cheques or electronic transfers come from anyone anywhere. I note, though, that with the cheques they do not require you to use a pre-printed pay-in form, as most other banks do now.

But two important features remain: You can't pay in cash, and you can't get cash out, and you can't get money out electronically except by sending it to the "linked" account from which you sent the opening cheque. Presumably these features are what let them get away with the slightly relaxed setup procedures.

Presumably if you closed your existing host account, you'd have to send them a cheque from your new account before the parasite could sink its teeth thereinto.