Formally identifying the customer is an important Anti-Money Laundering (AML) requirement (see section 14 for more detail). This process – known as Know Your Customer or KYC – is important in preventing fraud and money laundering and ensuring the likelihood that the customer will make the monthly payments for the vehicle they obtain possession of.
FLA standard for the prevention of financial crime
In 2017 motor finance providers that are members of the FLA agreed a new minimum standard of KYC checks to prevent financial crime in line with new money laundering regulations.
All finance providers must identify and verify the identity of all new private customers and carry out checks on new business customers. This is referred to as Customer Due Diligence (CDD).
To successfully carry out CDD, finance providers require retail staff and brokers to obtain some key information and/or documentation from the customer: