I’ve been thinking quite a bit about tax recently (here, for instance) and so an article in the current issue of the Economist caught my eye. Subtitled “Lessons from behavioural economics can boost tax compliance”, it reports that research by economists from Imperial College in London and the University of Chicago shows that people’s willingness to pay their tax in full and on time can be influenced simply by the wording used in communications with them. For instance, telling them that 90% of their fellow citizens paid their tax on time, and that they were in the minority with their tardiness, raised the rate of paying up by 5.1%. And this got me thinking about how we communicate the AML message to clients (and the public at large).
Last week I received a prospectus inviting me to invest in a Hotel Chocolat bond – you can read all about it here. As I quoted in that post, the brochure says: “To ensure compliance with the Money Laundering Regulations 2007, the Company [Hotel Choc] or Neville Registrars Limited may, in our/their absolute discretion, require verification of your identity.” On reflection, expert that I now am in behavioural economics, I wonder whether that couldn’t be better phrased to gain more support. How about: “To enable us to comply with the Money Laundering Regulations 2007 and thus to contribute most effectively to the global fight against drug trafficking, human smuggling, gun running and terrorist financing, etc.”. I think it transforms the sentence from reluctant kowtowing to legislation to proud participation in the battle against evil. And as an applicant, I would see more point in having to supply my information. After all, if a simple shift in wording can make people cough up their taxes, it should be a doddle to get them to prove their ID more readily.
If addressed to a prospective client though they might imagine they are among the suspects until cleared by their paperwork. Generically though it’s a great idea as so few of the general public understand the drivers behind the law and regs.
Tee hee, Roy! But surely you consider all of your clients to be gun-running drug traffickers and pimps until they prove otherwise…?