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Money Laundering - One for David perhaps?

Money Laundering - One for David perhaps?

For reasons which are not important, I opened an account with Pay Pal today. No identification was required. Why are they exempt?


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20th Jun 2011 13:36

Might be ok

When I set up an account with PayPal (as a purchaser rather than someone intending to sell anything), I felt that they had a clever identification method.  They put through a very small debit against my credit card account with a code in it and then I went back into their site and entered that number.  This tied me into the credit card account, which itself was already properly set up by the credit card company.  So it seemed to me that PayPal was "piggybacking" onto someone else's compliance procedures - but quite cleverly really.  I would not presume that PayPal are exempt - does anyone know more?

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By mwngiol
20th Jun 2011 13:53


I recently opened an account with a similar company to Paypal and I also didn't need to provide ID. I did have to verify my Credit Card though, in the manner mentioned by the previous poster.

However the limits on the transactions I can carry out are very low (but perfectly adequate for my needs), and in order to increse these limits I would have to provide ID.

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20th Jun 2011 14:25

AML guidance for banks etc

This is an extract from the anti-money laundering guidance for banks and similar institutions:

"Under certain conditions, where the money laundering or terrorist financing risk in a product is considered to be at its lowest, a payment drawn on an account with a UK or EU regulated credit institution, or one from an equivalent jurisdiction, and which is in the sole or joint name of the customer, may satisfy the standard identification requirement. Whilst the payment may be made between accounts with regulated firms or by cheque or debit card, the accepting firm must be able to confirm that the payment (by whatever method) is from a bank or building society account in the sole or joint name(s) of the customer.

. . .

One of the restrictions that will apply to a product that qualifies for using the source of funds as evidence will be an inability to make payments direct to, or to receive payments direct from, third parties.

. . .

A further restriction would be that cash withdrawals should not be permitted, other than by the customers themselves, on a face-to-face basis where identity can be confirmed."

Does that seem to fit the circumstances?


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By honesty
20th Jun 2011 17:41

Could be

I just thought it a bit strange that with all the proceedures that are necessary these days, withing 2 miniutes I had opened up a new money mangement account. Possibly, I could be anywhere in the World?? Maybe when I come to transfer money from there to my long standing account I will find the same double check. However, I am assured that I am now set up to receive payments from other people. Further to the "piggy back"suggestion, this would be rather interesting as my  bank account has been open some 40 years - long before security checks were even dreamed about. Perhaps my account will not prove to be a suitable "piggy back". 

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