Interesting ID Verification


(benjaminlbowles) #1

So I have got a friend onto Monzo, but it’s taken the COps a week to get back to him to verify his identity (with several prompts from me to ask what’s taking so long). Now they’re asking if he has a relative who is a famous politician or employed in a public facing role.

Has anybody else been asked this information, and generally what is the reason for it? I can’t seem to think this is relevant for KCY or AML, or am I mistaken?


#2

Yes, having connections to senior politicians, senior government officials, or foreign dignatories, is something banks have been known to raise. I have known both a son of a government minister and a member of aristocracy asked the same “politically exposed persons” questions by their banks.


(benjaminlbowles) #3

Ok, how do they find this information out?
As my friend is very much a lowly member of society with no major connections!


#4

good question!


(Kevyn) #5

I’ve never heard the term but Google explained all. It is interesting.

In financial regulation, “politically exposed person” (PEP) is a term describing someone who has been entrusted with a prominent public function. A PEP generally presents a higher risk for potential involvement in bribery and corruption by virtue of their position and the influence that they may hold.

[In the UK] a politically exposed person is considered any individual who fits any of the criteria listed below:

  • A foreign person who has held any time in the preceding year a prominent public function outside the United Kingdom, in a state or international institution
  • Members of courts of auditors or of the boards of central banks
  • Ambassadors, chargés d’affaires and high-ranking officers in the armed forces
  • Members of the administrative, management or supervisory bodies of state-owned enterprises
  • Heads of state, heads of government, ministers and deputy or assistant ministers
  • Members of parliaments
  • Members of supreme courts, constitutional courts or of other high-level judicial bodies

The definition explicitly excludes middle-ranking or more junior officials.

PEP status also extends to relatives and close associates.


#6

The rules for PEP also apply to family members or close associates, any individual publicly known, or known by the financial institution to be a close personal or professional associate.


(Kevyn) #7

Yeah, I cut the quote off too early :grin:


#8

While most countries use the FAFT definition of PEP, due to the extraterritorial implementation of FACTA you will find where there is any difference between domestic definitions of PEP and US definitions most financial institutions will apply a broader definition to encompass both definitions, despite no legislative link between PEP rules and FACTA compliance.


(benjaminlbowles) #9

Ok all very interesting, and rightly fair enough - but what data or data sources would they have used to determine PEP status?

Is this something Experian or CIFAS would of provided?


#10

Reed, Lexis Nexis, Dow Jones, and other private firms provide databases for this.

Financial Conduct Authority and the Joint Money Laundering Steering Group both publish comprehensive guidances on both PEP and other KYC related matters to assist firms in complying with their legal obligation.


(benjaminlbowles) #11

Is there a way if you can find out if you have PEP status yourself?


#12

I would have thought most PEPs would know they are, but it is that gray area of the people like family or work colleagues of PEPs that may find themselves unknowingly covered by such rules.

While the main databases are subscription only, there are some publicly accessible databases but unlike the largest that covers about 1.6m PEPs these are just for certain issues such as identifying Ukrainian officials who may be laundering state monies out of the country.


(Dan) #13

Your friend probably just has the same name or a similar name to a PEP I imagine, so it takes longer to verify.


#14

I have just Googled and there is a source at

https://namescan.io/FreePEPCheck.aspx

However it is open source and unverified so you may be able to maliciously add individuals or perhaps even remove real PEPs as the database is not validated


(Jonathon) #15

Nah I’m not famous enough :frowning:

This is interesting though - I didn’t know banks did this!


#16

not just banks, other financial institutions too


(benjaminlbowles) #17

Yeah I check namescan, he didn’t come up on it, nor did I (thankfully!).


(RK) #18

Hi,

I see many people have replied but just to say, PEP hits usually happen because your friend has a DOB or name similar to someone who is on the list. Usually providing ID and stating they are not a PEP should be enough. Monzo will run their own checks