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iD proof shown LOCALLY for distant building societies+
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ED
Posts: 617 Forumite
MSE readers are invited to vote, in this thread, for or against the following proposal. I aim (with your help) to develop this into an articulate, simply understood, case for putting to Parliament + wherever necessary on the way (Financial Services Authority, etc). Perhaps interested MSE readers can lobby their local MP, for starters.
1st draft :
Banks and building societies are required to counter money-laundering by obtaining proof of identity and proof of home address for all of their customers. Many financial institutions require the customer to show in-branch, or submit via post, an original document to prove iD (eg Passport, Driving Licence, Birth Certificate), plus an original document confirming the customer's residential address (eg utility bill or bank statement). This is a moderate inconvenience for people able to visit a branch.
It is a gross security risk of identity theft for people having to entrust such documents in the post where theft is rife. The Home Office has given Royal Mail new powers to vet employees after a dramatic increase in fraudster workers who penetrate sorting offices to steal cheque books, credit cards, ATM cards, and documents or copies of documents that prove iD and address. According to banking trade body the Association for Payment Clearing Services, the number of cards intercepted in the post rose by 62 per cent in 2004, netting more than £73 million spent on cards that never reached their rightful owners. According to Royal Mail, postal workers collectively stole 94,000 items between April 2003 and March 2004.
Some banks and building societies propose customers, instead of supplying original documents can supply photocopies certified by a professional person (eg solicitor, accountant, doctor, etc) who must include their contact telephone number, but the customer is likely to incur a fee for each certification. Identity theft remains a risk if such photocopies are stolen in the post, because vital data is included (customer's full name, address, signature, date of birth, mother's maiden name, etc).
I/we propose our Government make an arrangement with the four major high street banks, paid for from central funds, for creation of a LIP department, for Local Identity Proof. People can visit any high street branch of Barclays, Lloyds, HSBC or NatWest to show original documents proving identity and home address. Highly vetted, qualified staff photocopy and authenticate the documents, and forward them securely (possibly via online encrypted method) to the required distantly located building society or bank. This enables the customer to save or borrow with that financial institution.
Regular, monthly savings accounts have for several years been the highest paying moderate-term savings products on the market. For example, Derbyshire Building Society has paid 1.10% gross above Base Rate since summer 2004 for their Regular Savings account. The British public need to be encouraged and enabled to save (for home-buying, retirement, etc). However, postal submission of iD and address proof is currently essential to save with institutions located in Derbyshire or numerous other areas of the UK.
It is unfair for building society members collectively, and indeed the banks, to continue paying for staff time, plus compensation for postal thefts, under the current anti money-laundering arrangements. Moderate funding from central government to the big four high street banks to create LIP departments seems the sensible, prudent and fair way forward.
Failing this, it is crucial for building societies and banks to be legally required to use a secure method to convey original (or photocopy) documents back to customers. Currently, most institutions use normal post. Customers submitting such items to institutions should also not have to pay for secure postal supply.
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MSE readers : please vote 'For' or 'Against' the idea of LIP departments for the 4 major high street banks. Ideas for improving the facts or wording will be much appreciated.
Also an action-plan is being drafted for the order in which the working draft of the above should be sent, seeking ideas for improvement - perhaps :
1st) managing director(?) of each of the 4 major high street banks
2nd) manager of each building society
3rd) managing director(?) of each non-major bank
4th) chairman of Association of Building Societies
5th) chairman of Association of British Banking
6th) Financial Services Authority
7th) Banking Ombudsman
+ final version subsequently to :
1st) local MP of each interested MSE reader
2nd) Minister of Fiscal Studies(?)
3rd) The Treasury
4th) Chancellor of the Exchequer
5th) media (Telegraph, Guardian, BBC Radio 2 Jeremy Vine Show, ITV, etc)
1st draft :
Banks and building societies are required to counter money-laundering by obtaining proof of identity and proof of home address for all of their customers. Many financial institutions require the customer to show in-branch, or submit via post, an original document to prove iD (eg Passport, Driving Licence, Birth Certificate), plus an original document confirming the customer's residential address (eg utility bill or bank statement). This is a moderate inconvenience for people able to visit a branch.
It is a gross security risk of identity theft for people having to entrust such documents in the post where theft is rife. The Home Office has given Royal Mail new powers to vet employees after a dramatic increase in fraudster workers who penetrate sorting offices to steal cheque books, credit cards, ATM cards, and documents or copies of documents that prove iD and address. According to banking trade body the Association for Payment Clearing Services, the number of cards intercepted in the post rose by 62 per cent in 2004, netting more than £73 million spent on cards that never reached their rightful owners. According to Royal Mail, postal workers collectively stole 94,000 items between April 2003 and March 2004.
Some banks and building societies propose customers, instead of supplying original documents can supply photocopies certified by a professional person (eg solicitor, accountant, doctor, etc) who must include their contact telephone number, but the customer is likely to incur a fee for each certification. Identity theft remains a risk if such photocopies are stolen in the post, because vital data is included (customer's full name, address, signature, date of birth, mother's maiden name, etc).
I/we propose our Government make an arrangement with the four major high street banks, paid for from central funds, for creation of a LIP department, for Local Identity Proof. People can visit any high street branch of Barclays, Lloyds, HSBC or NatWest to show original documents proving identity and home address. Highly vetted, qualified staff photocopy and authenticate the documents, and forward them securely (possibly via online encrypted method) to the required distantly located building society or bank. This enables the customer to save or borrow with that financial institution.
Regular, monthly savings accounts have for several years been the highest paying moderate-term savings products on the market. For example, Derbyshire Building Society has paid 1.10% gross above Base Rate since summer 2004 for their Regular Savings account. The British public need to be encouraged and enabled to save (for home-buying, retirement, etc). However, postal submission of iD and address proof is currently essential to save with institutions located in Derbyshire or numerous other areas of the UK.
It is unfair for building society members collectively, and indeed the banks, to continue paying for staff time, plus compensation for postal thefts, under the current anti money-laundering arrangements. Moderate funding from central government to the big four high street banks to create LIP departments seems the sensible, prudent and fair way forward.
Failing this, it is crucial for building societies and banks to be legally required to use a secure method to convey original (or photocopy) documents back to customers. Currently, most institutions use normal post. Customers submitting such items to institutions should also not have to pay for secure postal supply.
_______
MSE readers : please vote 'For' or 'Against' the idea of LIP departments for the 4 major high street banks. Ideas for improving the facts or wording will be much appreciated.
Also an action-plan is being drafted for the order in which the working draft of the above should be sent, seeking ideas for improvement - perhaps :
1st) managing director(?) of each of the 4 major high street banks
2nd) manager of each building society
3rd) managing director(?) of each non-major bank
4th) chairman of Association of Building Societies
5th) chairman of Association of British Banking
6th) Financial Services Authority
7th) Banking Ombudsman
+ final version subsequently to :
1st) local MP of each interested MSE reader
2nd) Minister of Fiscal Studies(?)
3rd) The Treasury
4th) Chancellor of the Exchequer
5th) media (Telegraph, Guardian, BBC Radio 2 Jeremy Vine Show, ITV, etc)
0
Comments
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Its not a bad idea, but the problem is more easily solved if the BS is set up to do electronic ID checks as A&L do for their online saver. Since they mail you the login details they can check your address and I believe they do electoral roll checks. If a BS cant do this they are unlikely to be able to receive encrypted electronic information from the bank you visit.
I've said it before: The banks can make the regulations an easy ride or an absolute nightmare. I try to choose the ones that make it easy, I walked out of HSBC in disgust and took my money with me!0 -
True, many of us tend to choose the banks and bdg societies that make it easy to prove iD + address.
Building Societies, often in counties distant from potential customers, however, tend to offer the highest savings interest. This is especially true for regular, monthly savings accounts - as recommended by this site's Martin Lewis in his Savings Fountain principle.
Several friendly building society managers have already been notified of this 'working draft', so some private suggestions may become incorporated.
Any of the bankers regularly contributing on this site know whether it could be financially viable for building societies to become enabled to receive encrypted data from LIP departments of the 4 major high street banks?
LIP = Local Identity Proof. Martin Lewis (or MSE readers) may think of a more catchy nickname, as the above draft proposal develops, with collective input from this site's readership.0 -
I think this is a good idea, I would not be happy to post any documents which might compromise my security and put me at risk of identity theft.
Some of the regulations about proof of id and money laundering are not well thought out.
I would be intersted in backing this and I would be prepared to write to whoever can help to implement this kind of change.Perhaps interested MSE readers can lobby their local MP, for starters.
Not until after 5th May we can't as MP's cease to exist when parliament is disolved and all become parliamentary candidates:)0 -
nearlyrich - thanks for your encouragement. I think it will take a month or two to work on the draft proposal, before any of us start seeking help from our MPs.
Anyone currently got suggestions for improved wording?
Or additional relevant facts?0 -
Ed, dont get me wrong. I DO agree with you, and I certainly wouldnt send ID in the post. I just have a suspicion that the very building societies who now make it hard will be the ones who wont adopt a 'new fangled' introduction like this. However I am not trying to discourage you, far from it. It might be a good idea as nearlyrich mentioned to also draw attention to the more general shortcomings of the moneylaundering rules when it comes to producing ID for bank accounts0
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Since the last thread on identification, I have moved to the electronic verification method. It costs me £1.95 a go (and thats discounted to almost the top level). However, it is so much easier for me to deal with postal applications (which I get around 5 a week). So, on the face of things, the big guns ought to really be doing this now.I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.0
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lipidicman - I'm eager to see in this thread suggested text, from you, nearlyrich and others, re the more general shortcomings of the anti-money laundering regulations.
I would have expected building societies to welcome another body effectively being responsible to prove identity+address. It could remove/reduce threat of substantial fines for potentially letting frausters launder money.
Also, some (alas, not all) bdg soc's go to the expense of using Recorded Delivery post to return to customers their iD+address documents. This has to be paid for by the Society's membership. It would not be necessary under the proposed scenario.
Input from MSE readers will also be welcome detailing experiences of documents failing to arrive from bank/building society back to the customer (Driving Licence, Birth Certificate, bank statements, etc). What is the usual procedure?0 -
dunstonh - I see you are an Independent Financial Advisor, so does this mean you have to verify the iD+address of each of your potential clients? If I understand your correctly, this costs your business £1.95 per person, and so is a safe alternative (+ cheaper) than the prospective client sending you proof of iD+address documents postally, and you having to pay for Recorded Delivery (or better) to return them to the prospect.0
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ED wrote:dunstonh - I see you are an Independent Financial Advisor, so does this mean you have to verify the iD+address of each of your potential clients? If I understand your correctly, this costs your business £1.95 per person, and so is a safe alternative (+ cheaper) than the prospective client sending you proof of iD+address documents postally, and you having to pay for Recorded Delivery (or better) to return them to the prospect.
Correct. I have to identify everyone transacting business through my company.
Where I or my employees do home visits, I still get them to do it the old way, as asking someone for their driving licence/passport is easy in their home and it saves £1.95. However, the electronic verify id is perfect for postal as I dont have to see any documents and dont have to pay postage to return them. Normally its £2.50. I have it at £1.95. I would expect the big guns to be able to get it at £1.20-£1.50 a head.
There is also another requirement of financial services companies and that is the safe keeping register. Every time an important document arrives in the post and you dont get it immediatly back out, you have to log receipt and return in a safe keeping register. Passport, driving licence, marriage cert etc would be included in that.
So, the cost is more or less covered in the convenience and postage saving.I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.0 -
dunstonh - many thanks for this helpful input.
It will be interesting to hear from those in-the-know whether the electronic check would be adequate for building societies and banks. If so, @ just £1.20 - £1.50 per customer, I fail to understand by this isn't used by all of them.0
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