Western Union Tightens ID Requirements
Breitkopf, David, American Banker
Western Union has revamped its anti-terrorist, anti-money-laundering protocols to comply with -- and, they say, exceed -- the requirements of the USA Patriot Act.
In addition to the terrorist checklists the First Data Corp. subsidiary was already using, it has implemented some tighter guidelines, including personal interviews for transfers of large sums of money.
Like all other financial services companies, Western Union has been subjected to a dizzying array of new regulations. Joseph Cachey 3d, its vice president for global compliance, said that the company will be distributing North American and international policy manuals this year that spell out stricter rules for suspicious transactions. In some instances, those policies exceed federal rules, he said.
For example, when an individual wants to send $3,000 or more, the Treasury Department requires an agent to verify the name and address of both the sender and receiver, examine a current government-issued picture ID, and record the information. Western Union takes these steps for transfers involving $1,000 or more. (The average transaction it handles is $350, Mr. Cachey said.)
Additionally, the Treasury requires an agent to record the customer's Social Security number, name and address, date of birth, and occupation when handling transactions of at least $10,000. Western Union, which previously required that information for transfers of at least $8,500, now requires it for transfers of at least $7,500.
There are signs that customers are taking to the new rules with more aplomb than they did in the past when identification restrictions were tightened.
In 1997, when Western Union put stricter ID rules in place for unusually large money transfers, it "saw a drop in business," Mr. Cachey said. This May, in response to the Sept. 11 attacks, the company again tightened ID requirements on large transfers, but there was little or no "pushback" by customers, who for the most part are now more amenable to disclosing personal information, he said.
The Patriot Act requires companies such as Western Union to have an anti-money-laundering program that includes a compliance officer, policies and procedures, employee training in those policies and procedures, and an annual review of that process. …