AML questions from debit card company

cnewq5

I'd be grateful for some advice regarding AML questions I've received from Uphold (a digital currency platform) about transactions on a debit card.
(I could not find an exactly appropriate category for this post!)

Background
Briefly, you hold funds Uphold, and can use them to fund a debit card for payments. They do KYC (by which I am verified), and of course perform AML checks. You can add fiat currency (GBP in my case) to your account & use that to pay by card. I had been using the card for about a year because they give 2% cashback on purchases, which is quite good.

There were no problems with any of the purchases I have made, which include both in store and online transactions, and vary from single items for <£1 to large payments (eg >£1k for my late brothers' cremation).

What they are asking
They now ask for proof of my income, and want me to "explain" my spending over a certain period, and in particular to "explain"/"elaborate further on" transactions with one merchant. If not, they will put a "restriction" on my account.

Obviously, they can check the merchant for themselves. The company is longstanding and reputable, with excellent customer feedback, and their business is popular right now - as well as legal and respectable (not always the same thing).

My response
So I asked them what exactly needs explaining, but they have not said. Given the transactions are all recorded, so they know how much was spent & where - but not what was purchased - I assume they want to know the latter, which I think is intrusive. It may also be a way to gain information about my financial situation, putting me and my family at risk.

Advice, please!
To get to the point: I don't want to supply the information they ask for. I don't think it's worth surrendering privacy to that extent just to get 2% back on what I spend. I have a perfectly good bank - Monzo - and auxiliary bank accounts & credit cards in reserve. Uphold can do one.

My question is: other than restricting my account, can the company create difficulties for me? Am I even legally required to prove my funds and how I spend them are legitimate. I've searched online, but cannot find answers to these questions.

Thanks in anticipation!
Christopher N

MorningcoffeeIV

They're not tryng to get financial information about you to put your family at risk. They're simply fulfilling FCA requirements.

You can choose not to answer the questions. You should expect your account to be closed and probably a CIFAS marker.

MattMattMattUK

cnewq5 said:

It may also be a way to gain information about my financial situation, putting me and my family at risk.

How would providing legally required AML information to a regulated financial entity as required by the FCA put you and/or your family at any kind of risk?

grumbler

cnewq5 said:

What they are asking
They now ask ...to "explain"/"elaborate further on" transactions with one merchant.

MorningcoffeeIV said:

They're not tryng to get financial information about you to put your family at risk. They're simply fulfilling FCA requirements. Especially as the refuse to clarify "what exactly needs explaining".

MattMattMattUK said:

cnewq5 said:

It may also be a way to gain information about my financial situation, putting me and my family at risk.

How would providing legally required AML information to a regulated financial entity as required by the FCA put you and/or your family at any kind of risk?

Can you quote what exactly legal requirements they are fulfilling when asking for this particular information? Especially as they refuse to clarify "what exactly needs explaining".

cnewq5

I understand FCA rules.
Why would purchases from a legally operating, reputable company trigger a CIFAS marker? How is fraud involved on my side? I would have thought CIFAS is there in part to protect consumers from fraud.
Regarding risk, I assume you're aware there have been cases of owners or employees of even regulated financial entities engaging in malpractice. Also, there is the possibility of access by bad actors.
The more people who are aware of your income, spending, property or possessions etc, the more likely it is you may be targeted.
I'm far from paranoid - I have a fairly laid back attitude to life - but I don't see the point of increasing risks in exchange for minor benefits.
Nor do I particularly want an argument about the pros and cons of these matters. Just simply advice on the AML process and the law.
I thought MSE forum would be a good place to ask.

cnewq5

grumbler said:

cnewq5 said:

What they are asking
They now ask ...to "explain"/"elaborate further on" transactions with one merchant.

MorningcoffeeIV said:

They're not tryng to get financial information about you to put your family at risk. They're simply fulfilling FCA requirements. Especially as the refuse to clarify "what exactly needs explaining".

MattMattMattUK said:

cnewq5 said:

It may also be a way to gain information about my financial situation, putting me and my family at risk.

How would providing legally required AML information to a regulated financial entity as required by the FCA put you and/or your family at any kind of risk?

Can you quote what exactly legal requirements they are fulfilling when asking for this particular information? Especially as they refuse to clarify "what exactly needs explaining".

I get that companies are required to comply with FCA rules, and that includes AML compliance. I just don't see how the amount I've spent would trigger any concern. I also think it's strange to ask - so vaguely - for me to "explain" purchases from a company whose website they can visit and see it's nothing out of the ordinary.
Also, I was KYC approved by them. I use 2fa & in one case (transferring a modest amount of XRP/Ripple to a non-custodial wallet) was required to upload a real time photo to authorise the transfer. So it's not like they can think it's not me using the account.
My impression is that they think I spent more than I earn/own, though they don't say so explicitly. I don't want to go into numbers on here, but the amounts are not mind blowing.
To be fair, rules for companies that offer cryptocurrency services in the UK have just been tightened. For example, you have to give details about any wallet you transfer funds to, which was not the case before. I suppose they are eager to comply, as any sloppiness on their part could lead to them losing their license to trade here.
But they are not very good at communicating what they need to know. And I don't think it's reasonable to supply them with a list of purchases.

born_again

If you have used one retailer a lot then...business accounts excluded. could be what they are looking at.

You have to explain to them. Yes, they can see a retailer, but they do not know what you are doing.

GeoffTF

We have not been given enough inflammation make a reasonable guess at what is going on here. Nonetheless, suppose that they are suspicious about money coming into your account. It is then perfectly reasonable to ask about the money going out. If it was used to buy gift vouchers, for example, that would add to their suspicions. In practical terms, it does not matter whether they are being reasonable or not. If you do not comply, you could find yourself in serious trouble.

born_again

The joy of messing with Crypto.

cnewq5

I have only ever transferred money from my main bank account onto the Uphold account.
And as far as the bank goes, my ID and address are verified & my income is paid into the bank, and verifiable by them. So I don't see why I would be "in serious trouble" for not revealing this information to another party.
As Uphold know the merchant's business, they will know the type of purchases I made, but not the exact items. Since it is a reputable business, I see no reason why they need to know that.
If one has bought items of value, revealing details to a third party is unwise. There have been many cases of fraud, as well as data breaches. So sharing information does carry a risk. I'm surprised folk are not more conscious of that, especially on a site like MSE.
It has nothing to do with crypto per se. The transactions concerned have all been in fiat currency, and pounds sterling at that.
As I've already said, I do understand why the AML rules exist & that companies must comply. But I am shocked that they come into play for what are really quite unremarkable amounts.
Apart from anything, retail merchants themselves place limits on what you can pay in a transaction, and I spent nowhere near any limit. The same with bank transfers and card payments - including the Uphold card that I used in this case.
Anyway, I've exchanged messages with Uphold, and am currently awaiting a reply.
Thank you all for your input.

eDicky

Don't expect too much logic in requests from a compliance team who are probably directed to act by imperfect system algorithms raising a flag. You may find that if you supply a few mundane details of the card use as requested you'll hear no more from them.