Let’s say you work in a ‘B2C’ finance environment, such as a Pawnbroker, and a smart young man walks into your premises, wanting to do business with you. You’ve never met him before but he’s presentable, professional and seems like a nice chap. Don’t be fooled! It’s critical to satisfy yourself that he is who he says he is. Do you have a simple way to do that? And how can you reduce the risk of doing business with a fraudster?
As you probably know, anti-money laundering (AML) regulations state that your first step should be to perform an appropriate level of identity check to satisfy ‘Know Your Customer’ (KYC) requirements. This most often starts by the person being asked to produce some form of official documentation to prove their identity.
Imagine the prospective customer shows two forms of identity as requested – a French passport and a French identity card. The photos on the documents look like the man in front of you. So far so good. You may even take copies of his ID documents at the photocopier or scanner as part of the process that fulfils your compliance obligations. But what about checking the validity of the document itself? Would you know what to check on either French document to see if it’s genuine?
The truth is that unless you have had very specific training in how to spot a fake ID, you’re unlikely to know what to look for in a French document to make sure it’s real. What’s more, as our world gets ever-smaller, with easier intercontinental travel and mass migration, your customers are likely to present identity documents from a wider range of countries than just the EU member states or the UK.
Training your staff to make ID checks can be costly and time consuming and needs to be repeated regularly to keep up to date with the latest ID document features. What’s more, genuinely issued identity documents have a multitude of different security features which can’t be effectively validated by eye. And with several thousand different issues of world identity documents in existence at any one time – ID cards, passports, visas, driving licences and more – it’s very difficult to conduct manual checking with any degree of confidence, even with advanced training.
The manufacture and distribution of false identity documents has also been facilitated by increased use of the internet and advances in printing technology. So, whilst your manual checks may be thorough, they are often no match for modern forgeries which can be produced on a mass scale.
A cautionary tale:
Tony Machin, CEO
Our CEO since 2013 has led our business through a program of significant upgrades in technology and services and has huge experience helping businesses introduce the right processes for identity document checks.
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