Cooking with gas

As I was reminded today when I checked my watch and realised that the numbers seems to have shrunk somewhat, time is passing.  And although we are all now so familiar with the basic principles of the AML regime that we could recite them in our sleep (and indeed, according to my husband, some of us do), it is vital that we remember to revisit them from time to time to check that they are still appropriate and proportionate.  Someone in a training session last week encouraged me to question something I had been taking for granted when she asked, “About recent utility bills as proof of address – what if the customer does everything online and gets paperless statements?  And anyway, what counts as ‘recent’?”

Indeed.  So I settled into my wing-back chair to consult my beloved, leather-bound copies of the guidance, and it seems that the humble utility bill still has some status for due diligence purposes.  According to the JMLSG here in Blighty, when seeking documentary proof of someone’s address, you can ask for “utility bills (but not ones printed off the internet)”.  And a couple of references are made to documents being “recent”, without a definition of that term.  Surely it’s all relative – to me, 1987 still seems quite recent (you remember: IKEA came to the UK, and we had a hurricane, although I believe the two events were unrelated).  Looking further afield, to Guernsey and Jersey, the guidance in both jurisdictions says that residential address can be evidenced by “a bank statement or utility bill”, although neither island specifies that it has to be recent.  The Financial Supervision Commission in the Isle of Man, however, is a bit more prescriptive: as proof of address, you can accept “A recent rates, council tax or utility bill (recent in respect of utility bills is considered to be no more than 6 months old).  Utility bills received electronically, rather than by post at the relevant residential address, are not acceptable.  Mobile telephone bills are not acceptable as evidence of address under any circumstances.”

Of course we can all see the logic of that last caveat: a “traditional” utility bill (rather than one for a mobile phone) is related to a physical property – and after all, we are collecting information about the customer’s address so that the police know where to go to arrest him.  But is it really practical to insist that it has to be delivered by the postie?  After all, how many institutions ask for the bill and its envelope, to prove that it came by post?  And those who claim that a posted bill is much harder to forge than an e-bill are deluding themselves.  It’s not the posted-ness of the utility bill that is useful; it’s the fact that it ties the person to a physical address.  (In countries that use PO box addresses extensively, MLROs teach their staff to look for the “service address” on the utility bill, rather than the delivery address.)  So perhaps the time has come to look for a more practical and valuable alternative to that utility bill.  What could we ask for that would achieve what we need, i.e. proof that someone lives where they say they live?

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7 Responses to Cooking with gas

  1. Kay says:

    It’s an interesting point and one that comes up frequently when talking through requirements with staff…. something to consider when discussing an alternative, however, is the usefulness not only of the address on the statement, but the details of the actual bill itself. It’s all too often viewed as a document where we are only interested to see if the address matches the one on an applicatoin form – but should the bill show next to no use of the required utility over the period, it’s also a glaring red flag as to whether the ‘client’ actually physically lives there or just uses it as a front of respectability…. It’s hard to think of another document that could provide that kind of information (don’t get me started on bank statements and credit card bills…)

  2. Dear Kay
    This is a really excellent point, and not one I had considered. This is why I love hearing from people with experience at the coal-face of MLRO-ing. I shall add this to my CDD sessions in future, as it shows the humble utility bill in a much more favourable light. Thank you.
    Best wishes from Susan

  3. come on! the NSA knows who everyone is - you dont need to says:

    Utility bills and any similar forms of ID are a waste of time in the age of photoshop and cheap colour printers. The need is for governments to have a reliable database of citizens addresses, accessible by banks – or, failing that, recognise that address proof means diddly squat nowadays in an age of internet banking.

    • An interesting comment – as always, we’re treading a fine line between compliance and commerciality, between the information we would like to have and the information customers are willing to supply (whether to us, or to the government). I bet CDD is not a great concern in North Korea, for instance!
      Best wishes from Susan

  4. Paul Coleman says:

    Hello Susan
    The use of downloaded utility bills is so common now that, to be honest, asking for an “original” sent in the post loses us some credibility in the “real world”.
    In my training and guidance sessions, I try not to emphasise too greatly that address verification is to enable the policeman to knock on the door of that person. I regard the production of a utility bill as part verification of the identity information provided by the customer. (Name, Date of birth, nationality, address, etc.). We can verify a lot of information from the original Passport of Drivers Licence. The address verification by way of a utility bill means that either a criminal has to spend time forging a utility bill, which is not impossible of course, or to go to the utility company and set up an account with that address. The criminal therefore has to work that much harder to provide the verification we need. Maybe in cases of doubt we should insist upon two verification of address documents.

    In most jurisidictions we become familiar with the look of the utility bill, but clearly lose this familiarity if the customer is non resident.

    The suggestion by Kay of looking at the utility bill for reasonableness is an excellent comment and like you Susan shall use it. Thanks Kay..

    Regards

    Paul

  5. Dear Paul
    As always, a well-considered and helpful response. I’m with you all the way on the difficulty of insisting on posted bills – even personally, I would struggle to find one to offer my own bank by was of ID!
    And you’re right about part of the purpose of due diligence being to make the process more cumbersome for criminals: the more awkward and expensive we make it for them, the more likely some of them are to just stop doing it. We hope!
    Best wishes from Susan

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