From time to time I have a rant about the bad rap that AML gets, and today’s another one of those. Allow me to present two pieces of evidence. A fortnight ago I found a wallet on a bench in Cambridge. I looked inside, and there were a card to allow reduced price on the local buses, a £20 note, and a cashpoint card for a bank, with a PostIt note stuck on it with the PIN. I know, I know. A branch of the bank in question was just round the corner, so I took the wallet in. “Could you just confirm,” I asked, “that you have a telephone number on file for this gentleman, so that you can return his wallet.” “No,” said the girl on the front desk that all bank branches seem to have these days. “We can’t tell you whether he is a customer or not because of money laundering.” Now, if she had said – in polite terms, of course – because you might steal from his account, that I could understand, although quite why I would go into the branch when I could simply go to an ATM with his card and PIN and strip his account, I can’t imagine. But no: the reason she couldn’t tell me anything was “because of money laundering”.
And yesterday I found that somewhere along the line I had acquired a damaged £20 note – a small strip of it was torn off one edge. I went into a branch of my own bank and asked to exchange it. “We can’t just give you another £20 note,” said the man at the counter, “but we can pay it into your account.” “Why’s that?” I asked. You’re ahead of me here. “Because of money laundering,” he said without hesitation. I was in quite a good mood that day, so I didn’t challenge him to explain how exchanging one £20 note for another might be considered money laundering, when paying the £20 into my account wasn’t – did they consider it the proceeds of crime, or not?
But it does worry me that “because of money laundering” is used so glibly, as a catch-all explanation. Firstly it is just plain wrong, and it upsets me that staff in large UK banks – these two are among the very largest – are still being given the wrong information. And secondly, it makes people (I assume they’re giving the same explanation to other clients as well as to me) think that AML is just ludicrous – that it makes illogical demands of the financial sector, thereby stopping them doing perfectly acceptable things like swapping one £20 note for another. Stamp, stamp, stamp go my little AML trotters!