Why Everyone Should Have a Friend in AML & Fraud

They say that in Europe, it's impolite to ask what someone does for a living; the idea being that being defined by your work has the whole concept of a person's identity backwards. Work to live, not live to work. That's a purely American invention.

I've come to realize that while my career doesn't define me per se, it has given me the tools to be more helpful, which I truly enjoy.

That being said, there are truly times I wish that more people would ask their friends who work in banking compliance more questions- as boring as it honestly sounds on paper, we can be some of the most useful sources of information when it comes to helping you understand how to navigate some of the seemingly irritating landmines, terrifying fraud types, and understand what may not actually a threat to your financial well-being.

Before you get bored and leave, I came prepared with three specific (and hopefully helpful) examples:

The Home Purchase: if you've bought a home recently, you may remember an extra signature required in that already-huge stack; the Anti-Money Laundering Disclosure. My parents had to sign one when they purchased their home five years ago, and my mother noted that there was real apprehension when the closing agent explained why they were being asked to sign. This piece of paper, without foreknowledge, can easily be misinterpreted as an accusation of using laundered money to buy property.

The takeaway: a staggering amount (over 40%) of real estate transactions use laundered money as a way of "cleaning" money. As long as you can attest that the money you plan to put in escrow is legitimate funds, just know that the government is trying to catch money laundering where they know it already exists. Please don't get angry at your closing agent!

The Fraud Scheme: I see this one far more often than I'd like, but given my line of work, it's inevitable (and keeps me employed). The one I see most often is where a fraudster will pretend to be your bank, usually calling from a spoofed number, and telling you that they've identified some type of suspicious charges on your account. These people are very smart. They often already have publicly available information (address and phone number), and sometimes a piece of mail that didn't get shredded that has your bank information on it. They will then usually proceed to explain that they need to secure your banking information, so they will verify you through those 6-digit codes sent to your phone. (Yes, they've spoofed that phone number too.) Do not give them those codes. Do not give them any of your banking information. That is how they gain access to your accounts. If you ever find yourself in a situation where someone is claiming to be from your bank is calling you and asking you for information, hang up. Call the number on the back of your bank card instead. Legitimately no harm will come by doing so, and in fact, most banks will actually encourage you to do just that.

The takeaway:please do not beat yourself up if this has happened to you. It happens to a lot of very smart, savvy people who were caught off guard. Identity theft by means of an impersonator scam is typically protected by your bank's disclosures.

And lastly, the Red Herring: if you have a side-hustle, this one's for you. I belong to a small number of seller support groups for a small e-commerce business I help manage, and recently received a notice asking for our bank accounts to be re-verified. A recent chat thread in one of these groups found that this was a very hot topic, with a lot of the other business owners both confused and very scared by both the idea of using a built-in verification service (unknown new entity) and indignant at the idea of having to re-verifying their accounts. There was also a lot of chatter about how to bypass this process, as there was an overall sense of distrust at what was being asked of them. Many thought it was a new payment platform, others thought it was asking for our banking credentials (wrong on both counts). Simply put, if you've linked your bank account in order to get paid, the platform hosting your online store is within its rights to be asking you to verify your bank account, and #Plaid, from professional experience, is truly the best way to do it. Think of them as a banking fact-checker; they enable platforms to connect with users’ bank accounts by acting as a facilitator by verifying your successful logon through your own bank's logon. It is not a payment processor. If the idea still makes you squeamish, think of any other platform wherein you share your information; #Facebook, #Instagram- any of the other socials, really- when you sign up, the fine print states that those platforms do have the ability to access the information you put on there. Just a note though: If the verification of bank accounts is not ok, but you use #Paypal, #Venmo, or any other P2P service, or have linked two different bank accounts together... they typically also use Plaid.

The takeaway: It's up to you at this point to decide if using an online selling platform is for you if this is where you draw the line in the sand. No judgement, honestly! Everyone's privacy preferences a la their financial information are for them to decide.

I truly hope that what I've shared with you today was helpful or at the very least, informative. If you don't already have a friend in AML or fraud, I hope you'd consider me.