Under the spotlight: FLA Standard for the prevention of financial crime

11 May 2017

Last year, FLA members agreed a new Standard that requires them to identify and verify every customer in a process known as Customer Due Diligence or CDD.

To successfully carry out CDD, finance providers require retail staff to obtain some key information and/or documentation from the customer. These requirements vary depending on the method of due diligence conducted by the finance provider and the relationship they have with the retailer. We outline the differences below:

Retailer and finance provider are part of the same group

For retail staff working in a manufacturer retail outlet where the customer is served by their captive finance company:

  • Only one form of photo-ID is required or, if not available;
  • two forms of non-photo ID.

Retailer and finance provider are not part of the same group

Where the finance provider has no direct contact with the customer and is not part of the same group as the retailer:

  • One form of photo-ID is needed to identify the customer and one form of non-photo ID required to verify the customer’s identity.

Electronic identification and verification and online sales

Electronic identification and verification products are becoming increasingly popular. If a finance provider or broker use such a product, retail staff might only need to obtain information from the customer (and not any ID documentation). This information is checked against public electronic registers and any one of several robust verification tests are applied to ensure the customer is not impersonating someone else.

Any sale of motor finance made online or over the telephone (at a distance) requires an electronic ID and verification process to be applied.

Acceptable photo ID

-       Passport

-       Photocard driving licence

-       National identity card

-       HM Forces ID card

Acceptable non-photo ID

-       Old style driving licence

-       Evidence of a state or local authority benefit

-       Council tax statement or demand letter

-       Bank or credit card statement

-       Instrument of a court appointment

-       Utility, landline or mobile telephone bill

Responsibilities for retail staff

Any photocopies of photo-ID need to be stamped and signed to confirm the photo is a fair and true likeness of the individual. The document(s) should be of good quality (not fuzzy) and the details must match information or other documentation provided by the customer such as spelling of name, date of birth and address.