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WHAT IS THE PATRIOT ACT COMPLIANCE?
It is expected that personal information will be asked by banks when looking to open up a new bank account. However, since 9/11, banks are allowed to ask questions that may seem quite evasive. As a result, many people may feel harassed when opening a new account.

Everyone that opens a new account is affected by the Patriot Act and its anti-money laundering provisions.  The Patriot Act was developed as a result of the attacks that occurred on September 11th and covers many areas of anti-terrorism; affecting financial institutions. Financial institutions are affected, to some extent, since the terrorists apparently had no trouble opening bank accounts in this country and acquiring credit cards with fake Social Security numbers.

Responsibility of the banks
The verification of any individual looking to open an account has become more of a liability for financial institutions. They accomplish this by collecting customer identification information including name, birth date, address as well an identification number, which would be a taxpayer identification number for American citizens or a government-issued document for noncitizens.

Records of all of this information used to confirm any individuals identity must be kept. Any form if identification that you remit must be stored, i.e. driver's license. Your name is also going to be checked against a Government provided list of suspected or known terrorists or terrorists organizations.

If the institution feels that it is needed, they can get even more invasive. For example, a bank can inquire about the characteristics of your business or profession, the name and address of your employer, inquiries about your assets and how you generate your income. They will also likely ask you where is the money coming from that you are using to open the account with.

Red flags
The bottom line is that institutions are required to find out as much about their customers as they can. The amount of scrutiny you face will partly depend on the types of transactions you perform, and for what amount of money. Featured below are instances that may result in you setting off a red flag.

If you open an account with $150,000, it is likely that you are going to be asked for more than a driver's license for identification. The bank will also likely crosscheck you with your credit reports and other financial institutions.

If you ordinarily maintain an account balance of $4,000 and over the course of a few weeks deposit a few checks totaling $30,000, these transactions can set-off a flag.

If your actions are labeled suspicious by your bank, don't anticipate being informed of an investigation. As a matter of fact, the Patriot Law specifically states that individuals involved in the transaction should not be notified by the financial institution of any inquiries. They can opt to freeze your account, without letting your know the reason why. Don't worry, you will not be in the dark for any extended amount of time. Your bank will file a Suspicious Activities Report, turning your case over to the federal authorities.

These are things that the average consumer should not be worrying about. The greater part of legitimate customers are not even going to notice the execution of these regulations.


 

 

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