Banks, building societies and other financial institutions have a duty to safeguard against fraud and money laundering. But we know that those safeguards don’t always work as scammers are still slipping through the net…
As part of their commitment to protect you against fraud, financial firms are required to verify your identity when you’re trying to open new accounts. They can also monitor the way you use their services, to identify any suspicious activity.
Of course, with our latest research finding that one in 10 people in the UK had made a bank transfer, or knew someone that had made a payment, that later turned out to be to a fraudster, fraud checks are undoubtedly necessary.
It could be argued, however, that these checks are too loose – accounts can been opened in a matter of minutes and while banks do have to verify the customer’s ID, not all will ask to see official documentation. We also know that scammers are getting away with opening bank accounts to receive their ill-gotten gains.
In May’s Which? Money magazine, we reported that a number of First Direct customers had been in touch to complain that the bank’s checks had gone too far.
Several told us that when attempting to open a fixed-rate bond they were faced with a 30-minute phone interview. Some were even quizzed about their income, spending habits and assets held outside of the bank.
First Direct explained that over the past few years it has implemented new measures to better protect customers against financial crime. These include asking new and existing customers more questions than ever before to ensure it has ‘complete and accurate records’.
However, there are a number of ways banks can gather this information, including by using documents, data or information obtained from a reliable and independent source. There’s also some evidence to suggest that different financial institutions take different approaches to how they verify identities.
Over to you
So, is it really necessary to be asked about your assets, including classic cars, paintings and Isas held in another bank, before you can open a new account with a bank you’ve been with for years?
Tell us, what’s your experience of your bank’s fraud and anti-money-laundering checks when opening new accounts? What type of questions were you asked and were you asked to provide proof of ID? Did you find the questions intrusive, so much so that it put you off opening a new account? Or, given that accounts being opened fraudulently and bank transfer fraud is rife, are the extra checks a good thing?