An online ID check provider used by a number of estate agents and mortgage brokers under their anti money laundering obligations is calling for Politically Exposed Persons (PEP) registers to be scrapped.
George Ford, director at Veriphy, said: “As part of the Anti-Money Laundering legislation, companies are obliged to check individuals against PEP registers.
“The concept of a politically exposed person is defined in the UK Money Laundering Regulations 2007 as a person who has been entrusted with a prominent public function, or someone related to such a person. This, of course, encompasses a great deal of individuals from around the world.”
Although the true number of PEPs globally is unknown, one database contains over 1.2m unique profiles. By virtue of their positions or status, these people are considered to present a higher risk for involvement in bribery and corruption.
Ford said: “The Proceeds of Crime Act (POCA) has more than adequate provisions for what you should do if you think that there is something suspicious going on, so why make the process more complicated?
“Many financial institutions view such PEP registered individuals as compliance risks and have to spend significant time conducting enhanced monitoring of their accounts.
“As a result, someone sharing the same name as a PEP is subject, unnecessarily, to heightened scrutiny, both from financial institutions and regulators.
“What difference does it make if the person used to be an official somewhere in the world? What useful information does that provide an estate agent, an insurance broker or lawyer, when there are other simple and less invasive methods available to make sure the transaction is not part of a money laundering scheme?”
The online identity check system created by Veriphy is based on the third Anti-Money Laundering directive.
Ford went on: “Our headaches are two-fold when it comes to the PEP lists. The first is that the majority of the profiles do not contain dates of birth, so if you happen to share a name with an American senator then you are going to get a flag against you. The second is that there is a deep level of ignorance about what a PEP is and how to act if you are dealing with one.
“There is uncertainty and discrepancy with PEP registers. Other solutions provide more than enough reassurance that you are dealing with a legitimate transaction.
“There is no compelling need for PEP registers. They are creating unnecessary work and flagging legitimate and commendable people as high risk.”
Veriphy, which has been called the industry standard, is used by over 6,000 estate agents, mortgage brokers and other businesses.
Comments
why pay for this we always get copies of ID from vendors