Knowing your customer: the Art behind the Bluster

Much Has been made of the government's attempts to halt the flow of laundered money in the UK markets. The rallying cry of KYC (Or Know Your Customer) was heard a lot when the latest Anti-Money Laundering legislation came in but it meaning had been somewhat distorted from the original usage.

Knowing your customer has always been less about compliance and more about protection for the vendor. You have terms and conditions which grant you legal protection by defining the limits of what is your responsibility and what is not, and a contract document to identify firstly who you have the agreement with and secondly that they actually agree to it and when. How do you know that the subject that have a contract is who you think it is?

Now that there is a legal requirement to check that you know where your sources of income are coming from Never before has it been so important to be sure that you are dealing with the correct entity. Take things like simple name confusion.

Say you received an enquiry from a small publisher for goods. (There is no particular reason for picking this subject, It was the simply the first I found in our database. I am make no comment on the Companies I have listed other than they have names which could be confused .) Here are some good candidates for entities that match your prospective client.

• WESTERN AFRICA MAGAZINE LTD
• WESTERN AFRICA MAGAZINE LTD
• WESTERN AFRICA MAGAZINE LIMITED
• WESTERN AFRICA MEDIA GROUP UK LIMITED

But how to tell them apart? You will of course have obtained some billing details and some delivery details, but to know who you customer is you will need to check their details against the statutory registers to confirm they are accurate.
Referencing agencies offer a good one stop shop for verifying Applications for Credit within your industry, and also for satisfying the paperwork that substantial cash sales generate.  Any Sale for which you provide goods and or services prior to payment being received is being done on credit, and the credit is purely at you own risk.

Getting independant verification of the client's details brings you more comfort that you have recourse should anything go wrong, and that any remedy is directed at the right entity.