Re: getting bank account / debit card

No! There are very real laws to counter moneylaundering and they are used. It is not an excuse. Not only banks but anyone handling money has to abide very carefully by those laws. Even a 'suspicion' of moneylaundering has to be reported, without any real evidence. If it is not reported the person who had the suspicion (not the bank), or if he/she should have had a suspicion but failed to do so, can find him or herself facing criminal prosecution with the prospect of a prison term!

The criminal world has plenty of ways around the laundering rules. The rules just make it awkward for law abiding customers.

Has laundering actually decreased since these tighter rules were introduced - or has it increased?

'money laundering' *is* used as an excuse 95% of the time[0].

Think about it - if you were an EvilInternationalCriminal, would you

*really* try to launder 100 GPB a month from a UK current account[1] through a pension-with-Scottish-in-the-name in the hope of getting ((1200 quid/pa)+growth-charges-(tax_on_the_income)) back in 25 years time?

Hey! Let's trust the post office with my passport and original birth certificate.

Or would you stick it in an offshore hedge fund without telling the wife?

'course the marketing dept (rather than SOCA) may well be interested in the cross-selling oportunities...

rgds, Alan [0] opening an account with 6K cash (with "Tonbridge Depot" on the bands) in Bromley notwithstanding, natch. [1] With normal tax-paid payslips going in every month.

The banks understand their very real risks if a case arises where their documentation is defective, so that question is irrelevant to the banks.

Tony

We are not debating whether the criminal world has ways around the moneylaundering rules. The issue is that the banks have no choice but to abide by the moneylaundering laws and that's why opening an account is not just about the bank asessing the risk of you going overdrawn. I was saying in my post that the bank also have to abide by the moneylaundering laws.

I do not know whether the criminal world has ways around the laws or whether the incidence of moneylaundering has decreased, but that wasn't my point.

Have you or anyone else researched whether moneylaundering is used as an excuse 95% of the time? Please quote the authority for your statistic. Have you tried to open an account 100 times and 95 times the bank told you "we are using moneylaundering as an excuse for declining your account"?

Alan, sorry but you don't even seem to understand what moneylaundering is!

Whom are you asking? Please quote some context when replying to messages.

It is the reason why a homeless person or someone living in a shelter or being put up by friends or living as a lodger or renting a place with bills being inclusive cannot open a bank account... because he does not have a utility bill.

It was also the reason given to a friend of mine who was unable to get his (foreign) wife now living in England put on a joint account with himself even though he had had his account for over five years... she had no proof of her address... hardly surprising as she had just moved to the UK and running around to get utility bills put in a different name is not exactly what one expects to do in order to open a bank account.

In fact I cannot think of any other EU country which requires such proof - most are happy to allow accounts to be opened simply on the production of a passport, even by foreigners who do not live in the country concerned.

Axel

I am asking you, of course, as you were the one to make that wild unsubstantiated statement in the first instance.

No, he or she cannot open a bank account because he or she cannot prove his identity to the bank which the law says he or she must do and of which the bank must keep a record. I would also think that the lack of any traceable credit history would influence the bank against opening the account. It is not just because he cannot produce a utility bill.

So, how do YOU know that a bank uses moneylaundering as an excuse 95 times out of 100? I am pretty sure that a bank would not be able to tell you anyway if they suspected moneylaundering.

In message , SandalsMan writes

I have carried out annual surveys of the major banks and building societies for the past two years and am currently engaged in this year's survey. Part of the survey is carried out by post and part by face to face visit. The consistent answer to the question of why people may be refused a basic bank account is lack of proper ID and the fear of opening an account without lots of ID because of money laundering regulations. The individual bank staff are particularly concerned about current laws which leave them open to personal prosecution in those cases. Money laundering regulations are the most regularly quoted reasons for reluctance to open accounts. I'm not sure if the figure is

95% but wouldn't be surprised if it were, if we co8unt lack of ID as a requirement of money laundering regulations.

But, with respect Mike, that's not the same as a bank "using an excuse" of moneylaundering for declining an account, which is what Axel was saying

I don't doubt it Tim, but it's not so simple as refusing and account just because someone cannot produce a utility bill, that's all I was saying.

In message , SandalsMan writes

Not exactly, but as someone else has said they often refuse an account because of lack of one form of ID when another would be perfectly acceptable, and what I am being told by bank staff is that they are erring on the side of caution because of money laundering regulations making them personally responsible. This could be described as using the regulations as an excuse for not opening an account when it is not actually those regulations that are stopping the opening of an account.

Having done this in two different countries, this is not enough.

Proof that you are in the country for a specific reason is required. Both banks wanted to see employment contracts and one of them wanted a reference to check. And in both cases they "interviewed" me.

Neither would open an account for someone who just walked in and asked for one.

Having said that, they don't need any checks on address. They realise that this is silly

I haven't actually done this but I believe that you are wrong.

tim

You are right about the theory, wrong about the practice.

Banks really do refuse to open accounts for people who can't product document X, even though check Y would suffice instead.

tim

Part of the problem is that legislation is so wooly. ie:

Gov: If someone launders money at your bank and you do not take reasonable steps to detect and report it you will go to jail.

Banker: OK. Please tell me how I will know what reasonable steps are.

Gov: If you get sent to jail your steps were not reasonable.

Tony Blair was interviewed some months back on Radio 4 about the Terrorism bill. He said that we must have a specific offence of "glorifying terrorism". He said this was vital. That specific expression/offence must be in the bill. The interviewer asked him "What does 'glorifying terrorism' mean?" Tony replied "I think it means..."

So while the government says we must make such-and-such a crime without defining or even knowing what such-and-such is, it is no wonder that banks etc behave in an unreasonably cautious way.

It is nothing to do with proving identity... a passport should suffice for this. It is about proving where someone lives and also that that person pays bills at that address.

I believe that there was a recent survey in which it was concluded that the banks were failing the poorest sections of society.

Simply through having heard people's experiences.

Let us take a typical example... a student arriving at a university for the first time and opening his first bank account will probably have little difficulty even though he cannot produce proof of his address. Now the same person were he not a student would not find it easy, probably even impossible, to open a bank account, all other things being equal. Why? Because the banks want students to take out accounts with them in the hope of a profitable relationship.

Or if a vagrant were to win a couple of million on the lottery, I am sure that the banks and others would be falling over themselves to offer financial services.

Axel

A passport does not show where someone lives. A utility bill should show the name and address. That's why a bank needs to see a utility bill to prove not only the name of the potential customer but also the address.

My simple point is that the bank will not say to the customer "I cannot open your account because I suspect moneylaundering". So how can you say that the bank uses moneylaundering "as an excuse"? The bank will say something like "I cannot open your account because I cannot establish your identity (ie your address) because you cannot produce a utility bill (or whatever)".

So it's 95% of the people you have spoken to who have been declined rather than 95% of the population as a whole.

In message , snipped-for-privacy@white-eagle.invalid.uk writes

It is EVERYTHING to do with identity as Regulation 4 of the Money Laundering Regulations makes quite clear.

Only in part. The MLR merely states that identity must be obtained without spoecifying what is required. It is the Money Laundering Steering Group of that determines what all the Banks etc., agree will be acceptable. They have decided that the best proof of ID is a photo driving licence or passport.

That is correct, but it is in addition to the proof of ID. It is the Steering group that have selected this and it has two reasons, a) it backs up the primary ID and it goes someway to prove residency. This second point enhances the info from a credit register search which the institution may also do as part of their normal criteria (but not for ML purposes)

And the reason is??

I notice the use of the word 'probably'. I think you will find that the student would have as much trouble as anybody else. The answer is to open the account based on your parents address.

No, the ML regs are strictly enforced for everybody.

Only after they have proved ID etc., and you havent mentioned satisfying themselves as to the source of funds and source of wealth.