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Last Updated: Saturday, 19 June, 2004, 12:10 GMT 13:10 UK
Money laundering or money marketing?
Briefcase full of money
The tough new laws were brought in to fight financial crime

Following new regulations, most people accept they will be asked for detailed personal information during any kind of financial activity.

But when does a request for information go too far? And how do you know the information you provide will be used in the right way?

Opening an account is not as simple as it once was. You have to prove who you are - in duplicate - and give other information.

Banks blame tough new laws on money laundering and financial crime. But one Money Box listener is not convinced.

The chances of me putting down that I obtained the money from drug dealing or any other illegal activity is highly unlikely

Caroline tried to open a Cheltenham & Gloucester cash ISA but was shocked when she was asked for more than 30 pieces of information.

Speaking to BBC Radio 4's Money Box she said:

"They wanted to know whether I was employed, retired or a student, when they could contact me at home, was my telephone number ex-directory, was the money going to come from salary or wages or investments or a pension.

"The chances of me putting down that I obtained the money from drug dealing or any other illegal activity is highly unlikely, so therefore I think the questions posed were totally unnecessary."

Hidden agenda?

Caroline was so annoyed she did not open the ISA. And she told the programme of her suspicions as to what the information was really for:

"I think the company's market research is being done under the guise of this money laundering legislation."

Money Box approached Cheltenham & Gloucester for an explanation. Its Head of Communications Peter Mounty insisted it was a response to the Proceeds of Crime Act.

Anyone that is a terrorist is not going to put down that this is money laundering
Peter Mounty , C&G

The questions are there, he said, to protect staff from potential legal action if they had not taken the required steps to establish where the money was coming from and what it is being used for.

But how can a series of questions - that can be answered in any way the applicant chooses - prevent crime?

Mr Mounty admitted that "anyone that is a terrorist is not going to put down that this is money laundering".

However he said that although "none of them will prevent financial crime, all of them will help - or potentially help - to identify where the proceeds of financial crime are placed into account."

Generic questions

But in Caroline's case, it was an application for an ISA account with an annual savings limit of 3,000.

On this, Mr Mounty said: "In fairness I suppose because of the ISA form, I would have to say that the questions that we ask are generic questions that appear on all of our forms."

But he insisted they would not be changing it "because I think it sends a very clear message that C&G is concerned about fighting financial crime."

The programme was broadcast on Saturday, 19 June and will be repeated on Sunday, 20 June.

Asked if the information would be passed onto their marketing department, he responded:

"There is a place on the form where the customer can specifically say any information on this form does not have to be passed to the marketing department."

However, if the customer does not tick the required box, then all the information "will be looked at in a marketing capacity".

But he insisted that the information is not gathered for that purpose.

Mr Mounty said that in his experience customers had been happy to provide the information because they understood the need to fight financial crime.

BBC Radio 4's Money Box was broadcast on Saturday, 19 June, 2004, at 1204 BST.

The programme was repeated on Sunday, 20 June, 2004 at 2102 BST.

Money Box



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