Bank account checks
If you need to open a bank account, you need to be aware that the bank will require you to go through various checks and identification procedures before it can do so. Some of these procedures are required because banks (and building societies) are required to comply with the law, including important money laundering regulations.
You usually have to be at least 18 years old to open a bank account. You will have to provide proof of your identity – usually using at least two forms of identification.
Why might the bank refuse to open an account?
In some cases, banks are allowed to refuse to open a bank account for an individual. You may, for instance, be refused a bank account if you have previously been declared bankrupt, or you have a very poor credit rating, or you have a fraud conviction.
They are not required obliged to explain their reasons for refusal. A bank’s decision not to open a bank account for an applicant is legal – as long as it does not constitute unlawful discrimination on grounds of race, sex, disability, sexuality, and religion.
If you believe the bank’s decision to refuse to open a bank account for you was based on unlawful grounds, you could make a claim for discrimination in the courts; and/or complain to the Financial Ombudsman Service.
What are the money laundering concerns?
Criminals will use new bank accounts to launder the proceeds of crime when they can. To stop this from happening, adequate and effective anti-money laundering checks are implemented so ensure that money laundering activities are detected and reported as soon as possible.
Therefore, every applicant for a bank account must satisfy basic identity checks consisting of standard identification procedures. If the applicant is not resident, but is physically present in the UK, they will be asked to go through standard identification procedures.
If the applicant is non-resident, but not physically present in the UK, they should clearly demonstrate the need for a bank account, or prove that they fall within the criteria of wealth management customers. The bank will therefore carry out enhanced due diligence to make sure that sufficient checks are in place.
If members of HM Diplomatic Service want to open a bank account they will also be required to go through standard identification procedures. It is sometimes difficult for them to open a bank account as they do not have electronic data history.
If the bank is not satisfied you are who you say you are, you may be refused a bank account. And if the bank suspects money laundering motives – it must report this, and the authorities may be involved.