Assisting customers who don’t have standard forms of identification

About this guidance

Some customer groups may face barriers in meeting standard requirements for customer identification, which may lead them from being excluded from accessing essential financial services.

For customers who are considered to pose a lower money laundering and terrorism financing (ML/TF) risk, you can develop and apply a flexible, risk-based approach to customer identification requirements to ensure the community can access the financial services that they need, resulting in better financial inclusion outcomes.

This guidance will assist you to develop and use alternative customer identification and verification procedures to help these customers to access financial products and services.

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Which customers might need a flexible approach?

For a range of reasons and circumstances, some customers may face structural barriers or difficult circumstances that mean they cannot access or obtain standard identification documents, or they may have inconsistent personal details across their documents, such as name or date of birth.

Customers that may be affected include:

  • Aboriginal and Torres Strait Islander peoples located remotely or affected by the issues listed below
  • people and businesses affected by natural disasters such as floods or bushfires
  • people affected by family and domestic violence
  • people experiencing periods of homelessness
  • people who are or have recently been in prison
  • refugees, asylum seekers and recent migrants to Australia (including people from culturally and linguistically diverse backgrounds)
  • intersex, transgender and gender diverse people
  • people living in remote areas
  • people who have difficulty providing identification due to health or ageing-related reasons.

This is not an exhaustive list and there may be other customers who face barriers meeting standard identification requirements, while some customers may face multiple barriers.

To assist your customers who need a flexible approach, you may consider publishing information to outline what documents they could use to meet your customer identification and verification requirements.

Applying a risk-based approach to alternative identification

Under your AML/CTF program you must document the procedures you use to collect and verify customer KYC information to make sure customers are who they claim to be. The procedures you use must be based on the level of ML/TF risk that different customer types pose.

You are also required to document your risk-based procedures for using alternative identification and verification processes. Your alternative identification processes should be appropriately documented before being applied to your customers.

You should only use alternative identification processes for customers you have assessed as having a lower ML/TF risk in accordance with your risk-based systems and controls. You must take appropriate steps to mitigate and manage any risks that could arise, for example, due to changes in a customer’s risk profile.

In assessing whether to apply a flexible approach to customer identification, you should consider the person’s specific circumstances and their ML/TF risk profile, taking into account the transactions you would expect to see on the account and whether you expect to see regular, verifiable sources of income and expenses.

You should then determine what alternative documents are appropriate, based on the level of ML/TF risk associated with the customer, the likely transactions and the services requested.

You must also adequately document the supporting processes and procedures to assist staff to respond to the circumstances outlined in this guidance. In some cases this may require additional staff training.

In accordance with your record-keeping requirements, you must make and keep a record of your decisions and outcomes, including the customer’s particular circumstances, what you did to identify the customer and what information was used. Read more about record-keeping requirements.

There always remains the possibility that a customer’s risk profile will change. You are expected to apply your risk-based systems and controls and monitor and identify any unusual behaviour or transactions as part of your ongoing customer due diligence (CDD) obligations, and where it is deemed necessary, collect and/or verify additional KYC information.

If you identify a change in the customer’s behaviour, where the account and transaction activity is no longer consistent with the customer’s history or profile, you may decide to apply your enhanced customer due diligence (ECDD) program. This may include increasing monitoring of the customer’s transactions, imposing limits on the account or undertaking source of funds/source of wealth checks and verification.

Alternative identification options

The Anti-Money Laundering and Counter-Terrorism Financing Rules Instrument 2007 (No.1) 2007 (the AML/CTF Rules) provides you with the flexibility to use alternative identification that is reliable and independent.

Chapter 1 of the AML/CTF Rules provides that reliable and independent documentation includes, but is not limited to:

  • an original primary photographic identification document
  • an original primary non-photographic identification document
  • an original secondary identification document’.

While the AML/CTF Rules do not specify alternative documents and options to verify the customer’s identity, examples may include:

  • referee statements
  • government correspondence, including from state and territory correctional service agencies where it involves persons in prison or recently released from prison
  • a community ID or indigenous organisation membership card (for Aboriginal and Torres Strait Islander peoples), and
  • a customer’s self-attestation (statement) of their identity as a last resort, in instances of assessed low ML/TF risk.

There may also be other sources that you can use to independently verify the customer’s identity commensurate with your risk-based AML/CTF program.

You should consider the customer’s circumstances to determine the most efficient and effective means for them to submit documentation as part of the identification and verification process, particularly if they live in remote areas. For example, if it is not possible for customers to lodge documents in-person, you could consider accepting documents by email, certified mail or fax. You could also consider allowing the customer to provide a photo of themselves holding their identification documents, along with a copy of the documents themselves.

Referee statement

A referee statement can be used to establish a customer’s identity if you are satisfied that it is reliable and independent. Suitable referees might include:

  • a police officer
  • a religious leader
  • a community leader
  • a school principal or counsellor
  • the customer’s current employer or manager
  • a financial counsellor or financial capability worker
  • a legal aid or community lawyer
  • a recognised Elder
  • Services Australia (Centrelink) staff
  • another person before whom a statutory declaration can be made
  • a manager or warden of a refuge or shelter accommodation or homeless shelter
  • an official from an Aboriginal and Torres Strait Islander organisation, or a board member of a local Aboriginal Land Council
  • a health professional such as a general practitioner, nurse practitioner, psychologist, Aboriginal or Torres Strait Islander health worker, or counsellor
  • other social support services such as family violence workers, social workers or youth services.

There may be other suitable referees you choose to accept that are not listed here, depending on the customer’s circumstances.

What should a referee statement include

A referee statement can take various forms.

The statement must contain:

  • the referee’s signature
  • the name of the referee
  • how the referee knows the person
  • the date the reference was provided
  • the referee’s position and contact details
  • the referee’s knowledge of the person’s full name(s)
  • the referee’s knowledge of the person’s residential address (if known)
  • the referee’s knowledge of the person’s date of birth (actual or approximate)

how long the referee has known the person and the approximate dates involved.

 It should generally include:

  • any relevant family connections with the person
  • any other addresses where the person has recently resided
  • any alternative names or previous names the person has been or is known by.

The referee statement may also include what the referee knows about the customer, such as details about the person’s circumstances that have resulted in limited access to identification documents.

For Aboriginal and Torres Strait Islander people who may have mismatching records of date of birth and/or name, the referee’s statement could include a brief explanation of the reasons behind these circumstances.

Assessing whether a referee statement is ‘reliable and independent’

The following may help you to establish that a referee statement is reliable and independent. This is not a list of mandatory requirements.

  • Referee statements from an official of an organisation, using the organisation’s official letterhead.
  • A recent photograph of the customer included with the statement made on the official letterhead stationery of the organisation they represent, if practical.
  • Referee statements witnessed by an independent person (especially if you are unsure whether the customer and the referee are independent of each other, or if there is the potential for undue influence on the customer). You may also wish to specify the minimum qualifications of witnesses, for example, a school principal or teacher.

You may use a template or form that is tailored to meet your specific requirements for a referee statement. This could include both information collected from the customer and verification by their referee.

We have developed an example form that can be tailored to meet your specific requirements for a referee statement:

Government correspondence

Correspondence from an Australian federal, state or territory government authority or foreign government that shows the customer’s name may be considered a form of reliable and independent documentation.

For people recently released from prison, this may include identification documentation issued by the relevant state or territory corrective services agency, such as a Corrections Record Number.

You should also determine a reasonable timeframe for correspondence to be considered reliable, bearing in mind that standard forms of identification can be valid for long periods. For example, in some states a driver’s licence can be issued for up to 10 years. We encourage you to adopt a flexible approach and consider the barriers the person may face in obtaining recent government correspondence.

Based on your assessment of the risk, you may consider it reasonable to allow a customer to provide an older piece of correspondence up-front, and allow them additional time to provide more recent documents at a future date. This may be particularly useful for customers living in remote areas.

Customers declaring their own identity (self-attestation)

In limited circumstances, if you can’t establish the identity of a customer in any other way, you may be able to accept a customer’s self-attestation (statement) of their identity as a last resort. This might be because the customer:

  • is experiencing homelessness
  • is experiencing or has experienced family or domestic violence
  • is a refugee who has arrived in Australia without identity documents
  • doesn’t have any independent and reliable identity documents because the documents have been lost in a fire, flood or a natural disaster
  • can’t nominate an independent referee who meets your customer identification requirements.

You must not rely on self-attestation if you know or suspect that it is incorrect or misleading.

You must continue to apply ongoing customer due diligence measures, including monitoring, to manage and mitigate the ML/TF risk when customers attest to their own identity. You should also take steps to verify the customer’s identity when practical – for example, by requiring customers to supply identification documents confirming their identity within an agreed period of time.

Allowing additional time to provide standard identity documents

You may use alternative forms of identification to assist customers where they need timely access to financial services but require more time to provide standard identity documents.

For example, some customers such as those affected by a natural disaster, family and domestic violence, or other adverse circumstances may not have access to standard identification documents in the short term. They may have to reapply for lost identity documents or wait for their original documentation to be replaced or updated.

You may instead rely on alternative forms identification to verify the customer information. You should request that the customer provide, where appropriate, the standard identification and verification documents as soon as it becomes available, having particular regard to their specific circumstances and any barriers they may reasonably face.

You must apply a higher level of ongoing customer due diligence and transaction monitoring to the customer’s account until standard identification and verification can be undertaken.

Applying this flexible approach to Aboriginal and Torres Strait Islander customers

Aboriginal and Torres Strait Islander peoples face more barriers to accessing financial services than non-Indigenous Australians. There are many historical and contemporary reasons for the challenges experienced by Aboriginal and Torres Strait Islander customers.

AUSTRAC recommends that you develop and maintain procedures to help you identify and verify Aboriginal and Torres Strait Islander customers who don’t have standard identification. You should consider providing the option for your customers to advise you if they identify as Aboriginal and Torres Strait peoples, so you can determine when your flexible approach may be required and is appropriate.

We encourage you to adopt a flexible approach that is mindful of Aboriginal and Torres Strait Islander people’s historical, social and cultural circumstances, so that they are not denied access to financial services.

Alternative customer identification such as a referee statement is not required where the customer can produce a standard form of photo identification such as a current driver’s licence.

Alternative forms of identification documents and options for Aboriginal and Torres Strait Islander customers may include, for example:

  • a referee statement
  • an indigenous community identity or organisation membership card
  • correspondence from a government authority that shows the customer's name.

There may also be other sources that you can use to independently verify the customer’s identity.

Indigenous community identity or organisation membership card

You should consider whether the customer has been issued with an indigenous community identity card – these cards have been developed by community organisations to assist with identification requirements. These cards generally include the person’s name, other birth names, address, date and place of birth. They may or may not include a photo.

However, it is important to note that not all communities issue these cards, so you should have additional processes in place to identify and verify customers.

Community membership cards often contain less personal information because they are designed to assist in assessing and exercising cultural rights.

Who can provide a referee statement

Examples of suitable referees for Aboriginal and Torres Strait Islander customers may include:

  • a religious official
  • a community leader or recognised Elder
  • a school principal, teacher or school counsellor
  • Services Australia (Centrelink) staff
  • a police officer
  • the customer's current employer or manager
  • a financial counsellor or financial capability worker
  • a legal aid or community lawyer
  • another person qualified to witness a statutory declaration
  • a health professional or practitioner in an Aboriginal or Torres Strait Islander Medical Service or any mainstream medical services
  • an official from an Aboriginal or Torres Strait Islander organisation, or a board member of a locally relevant Aboriginal Land Council.

Some service providers in remote communities may be able to incorporate a photograph of the customer into a statement to confirm the identity of the customer, using the letterhead stationery of the organisation. Where appropriate, you may consider such a reference a suitable alternative for a formal photographic identification document.

Examples

These examples show how you can identify and verify Aboriginal and Torres Strait Islander customers who don’t have standard forms of identification.

Example 1: Opening an account

Customer A wants to open an account with the Careful Credit Union but doesn’t have the usual forms of identification that the credit union requires to verify a customer’s identity. Customer A explains that his identity documents use a different name because he lives in a community where he is known by a different name.

Careful Credit Union assesses the ML/TF risk of providing this designated service (opening an account) to Customer A as low. Careful Credit Union advises Customer A of additional information he could provide to verify his identity, in accordance with their AML/CTF program.

Later, Customer A produces a referee statement from an Elder from his community that includes a recent photograph, confirms his current name and address and includes details of the name by which he was previously known.

The credit union reviews and verifies the referee statement of Customer A by directly contacting the referee and following confirmation of the information provided completes the verification processes. Customer A agrees to provide the new identification documents in his name immediately upon receipt. Having obtained his new identification documents, Customer A provides these details and Careful Credit Union opens a personal account.

Example 2: Superannuation beneficiary

Customer B identifies as being of Aboriginal heritage and is the beneficiary of a death benefit on her mother’s superannuation policy after she recently passed away.

In accordance with cultural practices, Customer B changed her name after her mother died and her full name is now different to the name recorded on the beneficiary nomination form.

Noting that the details of the beneficiary is inconsistent with the information originally provided to Nest-Egg Superannuation Fund, the reporting entity reaches out to Customer B seeking clarification before progressing the request. Customer B advises that she has changed her name since she was first nominated as the beneficiary of her mother’s superannuation fund. Nest-Egg Superannuation Fund asks for information about Customer B’s name change as part of its identification and verification processes.

Customer B advises Nest-Egg Superannuation Fund that it is customary not to use the name of a deceased person. She also doesn’t have any official ID in her new name. She has provided her name and address to Nest-Egg Superannuation Fund but doesn’t know her actual date of birth – only the year and where she was born.

Nest-Egg Superannuation Fund assesses the ML/TF risk of providing the relevant designated services to Customer B as being low acknowledging that despite having a different name, the daughter is the only nominated beneficiary and offers to verify Customer B’s identity with a referee statement from an acceptable referee. Customer B informs Nest-Egg Superannuation Fund that her late mother’s doctor is also her doctor and can provide a reference about their relationship. In the reference, the doctor attaches a recent photograph of Customer B and includes details of her circumstances including the change of name in accordance with cultural practice. Nest-Egg Superannuation Fund contacts the doctor to discuss the reference and supporting information enabling it to verify her identity.

Example 3: Inconsistent identification documents

Customer C resides in New South Wales and wants to open a bank account with the Happy Returns Bank. He provides the bank with a range of identification documents from various government departments to prove his identity, however, his name and dates of birth are inconsistent.

Customer C isn’t sure which birth date is accurate and the bank isn’t sure which document, if any, it can use to identify him.

Happy Returns Bank assesses the ML/TF risk of providing a designated service to Customer C as low and decides to accept an alternative document to verify Customer C's identity. It asks Customer C for copies of the government documents.

The bank officer asks the customer if he is a member of an Aboriginal land council. The customer confirms he is a member of a NSW Local Aboriginal Land Council (LALC). The bank officer suggests that the customer obtains a reference from a current office bearer of the local LALC, which states that he is the person named in the documents. The LALC officer provides a reference on LALC letterhead that includes a photograph of Customer C. The bank reviews this information and after contacting the referee and confirming the information contained in the reference, confirms the customer’s identity.

Note: Aboriginal land council membership varies across States and Territories, and not all customers will be connected to one of these entities. AUSTRAC recommends that where applicable, you educate your staff on the Aboriginal land councils that exist in the areas where you operate so you can have informed questions and understand the needs of customers.

Applying this flexible approach to customers affected by family and domestic violence

It is critical for the safety of people affected by family and domestic violence to have access to financial services separate from the individual who is perpetrating the abuse. We encourage you to adopt a flexible, sensitive and compassionate approach to assisting these customers.

Supporting customers who are victims of domestic violence - importance of confidentiality

Confidentiality is paramount in matters concerning family and domestic violence. It is imperative that you do not take any steps that would alert the perpetrator to their victim’s activities.

It is important that victim-survivors of family and domestic violence and their advocates, referees and support persons are not asked to detail or provide evidence of the violence they have experienced. A statement by the referee to the effect that the customer has experienced family or domestic violence and why this has impacted on their ability to access identification documents should be considered sufficient.

These customers may have identification documents that have expired or have different addresses, or lack of access to any identification documents in the short term. You may need to use other reliable and independent means of alternative identification such as a referee statement.

Examples

Example 1: Customer needs to obtain new identification documents

Customer D is experiencing domestic violence. Her partner does not allow her to have access to a bank account and withholds her identification documents. She recently fled to a domestic violence refuge without any identification documents and needs to open a bank account urgently in order to receive government income support. 

Replacing each of Customer D’s identification documents takes over four weeks to process and often requires a form of supporting identification, which is difficult and time-consuming. It could take months for her to get enough identification documents to open a bank account. She is also experiencing delays obtaining the new identification documents because she is living at a temporary address.

The refuge director provides a written reference to the bank. After contacting the referee to discuss and confirm the information provided, the bank assesses the ML/TF risk of providing Customer D with the designated service as low and opens the bank account, with a requirement that Customer D further ratify her identity when she receives her new identification documents.

Example 2: Customer unable to obtain identification documents

Customer E is living with her brother who controls her finances and prevents her from working. She decides to flee her home and move into temporary accommodation.

A social worker goes to the bank with Customer E to open a new bank account so she can receive Centrelink payments. She doesn’t have any identification documents, but has photos on her phone of her passport and driver’s licence that shows her previous address.

The bank assesses the ML/TF risk of providing Customer E with the designated service as low and approves opening the account based on the photos. The bank requests that Customer E provide her identification documents as soon as she is able.

The police take her to her former home to retrieve her belongings and identification documents. She returns to the branch two weeks after the account is opened and completes the standard identification checks.

Example 3: Using alternative identification

Customer F has left an abusive relationship and is staying at a friend’s home. She needs a bank account to receive a grant which will allow her to relocate to her parents’ home interstate.

Customer F doesn’t have any identification documents. She obtains a reference from her general practitioner of several years who is familiar with her situation. The bank assesses the ML/TF risk of providing Customer F with the designated service as low and uses the reference as a basis for opening the account.

Applying this flexible approach to customers affected by a natural disaster

Customers who have been affected by a natural disaster may have suffered significant losses or damage. We encourage you to adopt a flexible, sensitive and compassionate approach to assist these customers.

These customers may lack access to any identification documents or their documents may have been destroyed. It can take time to piece together information and reapply for identity documents. You may need to use reliable and independent means of alternative identification such as a referee statement or letter from a government agency.

Example: Customers’ identification documents are destroyed

Customers G and H are a married couple who operate a mixed farming enterprise. A major bushfire impacted their region and like many of their neighbours the family lost their home, surrounding buildings, farm machinery, fencing and stock.

The fire destroyed all of their personal and business documents including all forms of personal identification, preventing them from accessing their bank accounts, in particular, the receipt of special Government disaster relief payments.

After visiting the nearest branch of their bank, and mindful of the hardship endured, the bank requests that Customers G and H provide evidence of the receipt of disaster payments. In the absence of any primary and secondary identification documentation, they obtain a referee’s statement confirming their personal details and circumstances.

A local police officer witnesses a statutory declaration confirming their identities but also that the family had been affected by the bushfire resulting in the loss of property, personal belongs including identification documents.

On production of this information, the bank made arrangements to enable the family to access their bank accounts. Customers G and H agreed to provide details of their standard forms of identification once they are replaced.

Applying this flexible approach to customers who are incarcerated or to be released from prison

In various state and territories, correctional services require prisoners to hold a bank account prior to their release from prison in order to receive a Services Australia crisis payment.

Standard forms of identification for prisoners are either stored with any other personal property or remain with family, making access to bank accounts difficult to negotiate.

In some states and territories, the relevant correctional services department may issue photographic identification to assist persons transitioning out of the prison system. In some cases, it is necessary for the customers to engage financial counsellors who work with prisoner case workers and reintegration officers to assist in opening a bank account. 

Example: Customer will soon be released from prison

Customer J is scheduled to complete their prison sentence and be released in two weeks, and will receive a Service Australia crisis payment. However, her bank account was closed during their period of incarceration.

Customer J cannot access any identification documents because the prison has locked them in secure storage, and obtaining a proof of age card will take a minimum of five weeks to process.

A financial counsellor who is familiar with Customer J’s situation, having worked with her for a period of twelve months while she has been incarcerated, agrees to provide a written reference.

Having reviewed the reference and spoken directly with the financial counsellor, the bank agrees to open a new account to ensure receipt of the Services Australia crisis payment. 

Applying this flexible approach – intersex, transgender and gender diverse customers

Customers who are intersex, transgender or gender diverse people may not have accurate forms of identification for a range of reasons, including financial hardship. For example, the costs involved in updating name and gender records on a birth certificate and other standard forms of identification can be prohibitive.

Customers who do not have identification documents that match the individual’s name and gender may result in misgendering, and this can have a traumatic impact on the person. This can be a complex area, and ensuring that your staff maintain accurate customer records and file notes will make sure that your customers do not have to explain their gender again in future interactions.

Example 1: Customer obtains new identification documents

Customer K is a trans man and uses pronouns he/him. Customer K obtained a declaration from his general practitioner verifying his identity and affirming his gender and successfully updated his name and gender in his passport and birth certificate.

He provides the new passport and birth certificate to a financial institution that he banks with and asks that they update his account details accordingly. After considerable discussion, the financial institution agrees to update the account name (displayed on the debit card and mail).

The financial institution recognises the impact on Customer K’s mental health of receiving correspondence with the former name (also known as ‘dead name’). The financial institution proactively advises Customer K of outstanding items where their correspondence and banking transactions will remain in Customer K’s former name for a period of time.

From this case study, financial institutions should be mindful of the negative impact on customer’s health where gender identity and pronouns are not updated in a timely fashion across all elements of the financial institution, including transaction details. In this case study, the representative demonstrated mindfulness to proactively alert the customer of where this may occur for a period.

Example 2: Staff awareness on gender identity improves the customer experience

Customer L has experienced personal financial hardship and seeks early access to her superannuation fund. Customer L contacts her superannuation fund to inquire about how to access an emergency payment.

Customer L is a trans woman and uses pronouns she/her. She overlooked updating her superannuation fund biographical details from when she established it years ago, which do not align with her gender identity. She contacts her superannuation fund to provide this information.

A new staff member addresses the inquiry who initially considers denying access to the account as they initially suspect that a fraud may be attempted. Following a brief discussion, the staff member identifies the active account under Customer L’s former details. Customer L reveals her current driver’s licence and passport were recently stolen and that she is waiting to receive replacements and is unable to provide copies of these documents to the superannuation fund.

The staff member recalls the induction training they received about gender identity, pronouns and misgendering, while recognising the superannuation fund’s ability to adopt a flexible approach to providing access to financial services.

The staff member works with Customer L to identify documents that meet the superannuation fund’s requirements to progress her application, including a declaration from her general practitioner verifying her identify and an updated signed photograph.

In accordance with the superannuation fund’s record keeping requirements, the staff member makes a note of Customer L’s gender identity and preferred pronouns for when a staff member is next in contact with her either via telephone or written communication. The staff member provides a reference number to Customer L to this record so she does not have to repeat the same information, should she need to call again.

The content on this website is general and is not legal advice. Before you make a decision or take a particular action based on the content on this website, you should check its accuracy, completeness, currency and relevance for your purposes. You may wish to seek independent professional advice.

Last updated: 17 Jan 2024
Page ID: 232

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