Why are Building Societies so rigid on KYC

schiff

I applied for a YBS account a few months ago but although I have several open accounts with them that I was depositing to monthly and had had some closed accounts with them and have been in my current home for 50+ years and can easily check my position on TransUnion and Experian via apps with banks and credit cards that I have - they still insisted that they needed documents to prove my identity. Cost to me about £1, maybe trifling but it was the principle of it. I had made an exploratory deposit anyway which was credited to the account and showed on the app.  I complained about it over several weeks and the lack of flexibility, common sense, etc etc and eventually they paid me some compensation. 

The interest rate anyway was worth it so I complied. All is OK now but they've lost a credit card document I sent to them. They are still looking for it!

Now I've got the same issue with Leeds BS. I've no open accounts with them but had one last year and I've told them. Similar exchange of emails but they have made their final decision and closed my complaint! Every time someone opens an account they are legally obliged to verify the identity in all circumstances - they say. Their RS is 5.25% which is bottom of my acceptable level so I'm still debating.

Over the same period I've opened credit cards - where it's reasonable to expect to be 'verified' - that have been accepted without a murmur. 

Hoenir

Financial institutions operate under ever increasing amounts of strict regulatory supervision.  If they don't accord they get fined heavily.  Nothing more complex or sinister.  

kimwp

The question to why is a company spending money on something that doesn't add to profit is nearly always because they are legally required to.

DullGreyGuy

Did you not see how many billions banks have been fined globally for not doing proper checks? 

When regulators get ever heavy handed with fines banks will get ever more thorough on the checks 

d63

That they need to carry out identity checks for a new customer is understandable, but the OP is a long-standing existing customer with open accounts in use. Something similar happened to me when I wanted to open another easy access account with Cynergy as the 1 year bonus had expired. Despite already having more than one open accounts with them they now want me to submit photo-ID, (which I do not have). Frustrating to say the least.

Hoenir

With many millions of accounts held. There's not the resources to deal with cases on an individual basis. Too costly and time consuming. 

dunstonh

Why are Building Societies so rigid on KYC

Ever heard of the FCA?  Have you seen the fines they dish out when things happen that they do not like?

- they still insisted that they needed documents to prove my identity. 

Most places use electronic checks nowadays but have to revert to the old ways if the electronic checks fail or give a lot of false positives.  

Also, if the FCA has not been happy with the way a firm has handled its AML systems & processes it can put more onerous requirements on them for a period until they are satisfied.

Every time someone opens an account they are legally obliged to verify the identity in all circumstances - they say. 

They are correct, but it doesn't end there.  It can be ongoing, where there are top ups and with withdrawals.

Over the same period I've opened credit cards - where it's reasonable to expect to be 'verified' - that have been accepted without a murmur. 

Credit arrangements are different to savings and investments.

Swoosh84

schiff said:

I applied for a YBS account a few months ago but although I have several open accounts with them that I was depositing to monthly and had had some closed accounts with them and have been in my current home for 50+ years and can easily check my position on TransUnion and Experian via apps with banks and credit cards that I have - they still insisted that they needed documents to prove my identity. Cost to me about £1, maybe trifling but it was the principle of it. I had made an exploratory deposit anyway which was credited to the account and showed on the app.  I complained about it over several weeks and the lack of flexibility, common sense, etc etc and eventually they paid me some compensation. 

The interest rate anyway was worth it so I complied. All is OK now but they've lost a credit card document I sent to them. They are still looking for it!

Now I've got the same issue with Leeds BS. I've no open accounts with them but had one last year and I've told them. Similar exchange of emails but they have made their final decision and closed my complaint! Every time someone opens an account they are legally obliged to verify the identity in all circumstances - they say. Their RS is 5.25% which is bottom of my acceptable level so I'm still debating.

Over the same period I've opened credit cards - where it's reasonable to expect to be 'verified' - that have been accepted without a murmur. 

Sorry to hear you are having issues, I literally just opened up both a Leeds BS and Yorkshire BS account on the 24/03, had a very different experience to you.

Yorkshire BS asked for HooYu identity check to be completed online which I done, account was then accesible later in the day.

Leeds BS did not ask me for anything other than standard Qs on the application, they did request a deposit as part of the application which I paid VIA debit card. Again, account was fully open same day.

fun4everyone

One of the parts that is particularly intrusive to me is when even after passing all the opening checks, you are made to explain yourself when transferring a small amount from your own account to another of your own accounts.

It was banks I have had this on so far though, not building socs.

dunstonh

fun4everyone said:

One of the parts that is particularly intrusive to me is when even after passing all the opening checks, you are made to explain yourself when transferring a small amount from your own account to another of your own accounts.

It was banks I have had this on so far though, not building socs.

Banks cannot win.

If they dont ask and it turns out it was a fraud, they are pressured to refund you.  If they do ask then they get criticised.

For reference, I stopped a coerced withdrawal recently through enhanced questioning.   So, don't knock it.

born_again

d63 said:

That they need to carry out identity checks for a new customer is understandable, but the OP is a long-standing existing customer with open accounts in use. Something similar happened to me when I wanted to open another easy access account with Cynergy as the 1 year bonus had expired. Despite already having more than one open accounts with them they now want me to submit photo-ID, (which I do not have). Frustrating to say the least.

Many older customers have never gone through the new checks. As such they have to go through the same as a new customer.
Also add in details get changes & people never update banks/B/S with these details.
So it's a good time to make sure all details are 100% correct.