Do as I say

I’m going to do to you what is often done to me: I am going to tell you my own anti AML story.  Actually, it’s an anti anti AML story – you’ll see.

In deference to the diktats of the Financial Services Compensation Scheme (spread that money around) and in an attempt to earn some interest, I put my company money into a variety of one-year fixed interest savings bonds.  One, at Financial Institution 1, matured the week before last.  Their interest rate has plummeted, so I decided to move it over to a similar bond account that I have at Financial Institution 2.  When FI1 asked me to nominate the account for the transfer of the closing balance, I gave the details of FI2.  I received a closing statement from FI1 – and a phone call from FI2.  We can’t take this money, they said, because FI1 is not the account you used to fund the bond initially [that was my general business current account at Financial Institution 3].  Ah, thought I: a source of funds enquiry – how appropriate and, to be honest, rather exciting.  And so I explained all of the above, using all the key words I know MLROs like, and offering to scan and email the closing statement from FI1.  But to no avail: FI2 said that they had to return the money whence it had come.  But you can’t, I explained, as the account at FI1 is now closed – hence the “closing” statement.  Ah, said the chap.  In that case, we’ll have to send you a cheque.  Wouldn’t a bank transfer be safer, I asked, and slightly less likely to lead to money laundering, as I could take your cheque anywhere…?  Silence.  I imagined frantic riffling through the pages of the AML manual.  No, came the answer: only a cheque can be done.  Harrumph.

Anticipating trouble, on Saturday I called into my local branch of FI3.  I told them the story.  Soon, I explained, I will be paying in a large cheque from FI2, which is bound to trigger questions, but as proof of source of funds I will have only a closing statement from FI1.  Please could you note on my file that I have warned you about this, and perhaps we can short-circuit any alerts.  No need to worry, said the manager of the branch: our cheque people will look only to see that the payee name matches, and our fraud people won’t care as long as the cheque comes for a UK-regulated institution.

*head in hands*  You can see why I have anonymised the names.  It makes me despair, this unthinking, illogical application of AML legislation.  FI2 is required to ascertain source of funds and, if they are happy with the explanation, proceed.  They were happy with the explanation, but “computer says no” and only one account can be recognised for money in and out.  FI3 is required to do source of funds checks, and instead seems to be applying an outdated and frankly dangerous (for them) reliance on cheques from regulated institutions.  I have yet to receive the cheque and try to pay it in: I’ll let you know.

This entry was posted in AML, Due diligence, Money laundering and tagged , , , , , . Bookmark the permalink.

7 Responses to Do as I say

  1. Alex Erskine says:

    Great story! Good luck with the cheque.

    • Thank you for your comment, Alex, and welcome to the blog. Honestly, I despair sometimes: no wonder the public hates AML and blames it for all sorts of things, if this is how it is delivered at the coal face. Unthinking application – makes me grind my teeth!
      Best wishes from Susan

  2. Claire says:

    Hahaha, banks and administrative rules but no common sense. When I was still living under the sun, during my divorce, I was awarded 2 years back of child benefits, a nice sum of money. I was moving banks (away from my ex’s bank), and approached a smaller, less posh bank. They refused because that money was suspicious. Paid out by a government agency. Pfff.
    I wonder how your story will continue.

  3. CDWOS says:

    Don’t you just love the FI’s inability (despite their in-house AML experts) to interpret the AML rules and arrive at a practical implementation!!!
    One of the big four has written to me to apologise for the problems caused and thanked me for highlighting a serious training issue that they were taking forward…. The story was about the downgrade to an ordinary current account from one that you paid for which was was a trigger event and “the Law required that I provide full fresh CDD” – red rag and bull came to mind instantly and I asked where in the Law this was stated – Silence…….I then explained that I was one of the banking regulators who had written the Law, I really, really would like to know where in the law this was stated……….no response to that or to my request to see the Manager, he would n’t be back for an hour, when I said I would wait this became the afternoon, the Head of Compliance was out of the office though strangely when I rang his number he was sitting in his office upstairs!! Reason for my irritation apart from “red tape for its own sake” was that other members of the public, particularly the elderly would have believed this rubbish and been seriously inconvenienced……….!

  4. I could not agree more, CDWOS – people are put to great inconvenience, and are taught (incorrectly) that AML is a big hassle that is designed to put decent customers to unnecessary trouble. Glad to hear you put the wind up this particular FI…
    Best wishes from Susan

  5. Pingback: Hypocrisy and heavy-handedness | I hate money laundering

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