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Identifying customers who don’t have conventional forms of ID

Some of your customers may not be able to provide the identity documents you would usually rely on for applicable customer identification procedures. Without conventional forms of identification it may be hard for people to access financial services.

For example, they may not have a driver’s licence or a birth certificate, the information in their identification documents could be out of date, or there could be conflicting information in different documents. This might be the case for Aboriginal and Torres Strait Islander customers, customers who are affected by a natural disaster such as bushfires, transgender customers, people with limited access to identity documents (such as those who are experiencing or have experienced family and domestic violence, people experiencing homelessness or with an address inconsistent with their identity documents), or customers who have come to Australia as refugees or other social or cultural circumstances that make it more difficult for a person to identify themselves or to access conventional identity documents.

AUSTRAC recommends a flexible approach to identifying and verifying customers who don’t have conventional ID, while taking into account your own money laundering/terrorism financing risk profile. For example, you might use several types of secondary documents to establish a customer’s identity instead of a primary identification document.

Or you might choose to use alternative identification that is 'reliable and independent'.

Using alternative identification

While the AML/CTF Rules give guidance about what reliable and independent documentation can be, they do not provide a comprehensive list.

If you decide to use alternative identity proofing processes you must do so in accordance with your risk-based systems and controls.

Applying this flexible approach for Aboriginal and Torres Strait Islander customers

AUSTRAC recommends setting up protocols to help identify and verify Aboriginal and Torres Strait Islander customers when you can’t rely on conventional identification and verification methods.

There might also be times when Aboriginal and Torres Strait Islander customers produce identification documents with conflicting information. For example, different government agencies may record different dates of birth for the same person, which makes it difficult to establish or verify their identity.

We recommend adopting a flexible approach that is mindful of peoples social and cultural circumstances. This might include using ‘reliable and independent’ alternative types of identification for Aboriginal and Torres Strait Islander customers such as:

  • A referee statement that can be used to establish a customer’s identity. Further information on referee statements and the information that should be included in the statement can be read on this page.
  • An Indigenous community identity card.
  • A reference from a community Elder.
  • A reference from a board member of a local Aboriginal Land Council or Aboriginal/ Torres Strait Islander organisation.
  • A government letter that shows the customer’s name.

Examples

These scenarios show how you can identify and verify Aboriginal and Torres Strait Islander customers who don’t have conventional forms of ID. These examples might help you consider how you can identify and verify other customers who don’t meet your usual customer identification requirements.

Example 1: Opening an account

Customer A wants to open a credit union account, but doesn’t have the usual forms of identification that the credit union uses to verify a customer’s identity. He explains that he lives in a remote community and recently changed his name. The credit union assesses the money laundering/terrorism financing risk as low. It decides to use an alternative identification document and tells Customer A it can accept a reference from an Elder of his community that confirms his name and address. The credit union reviews the reference Customer A provides and completes the verification.

Example 2: Superannuation beneficiary

Customer B has recently died and her daughter, Customer C, is the beneficiary of Customer B's superannuation policy with Superfund A. However, Customer C changed her name after her mother died and her full name is now different to the name originally recorded in the form nominating her as the beneficiary. Superfund A wants to be sure that she is really Customer B's daughter and asks for information about her name change.

Customer C identifies as Aboriginal and tells Superfund A it’s customary not to use the name of a person who has died. She doesn’t have any official ID in her new name. She has provided her name and address to Superfund A, but doesn’t know her actual date of birth – only the year and where she was born.

Superfund A can’t verify her current name or date of birth, but assesses her money laundering/terrorism financing risk as low and decides to verify her identity with a reference from an acceptable referee. Customer C tells the Superfund that her mother’s doctor is also her doctor and can provide a reference about their relationship. Superfund A uses the reference from the doctor to verify her identity.

Example 3: Conflicting identification documents

Customer D wants to open a bank account and shows the bank a range of identification documents from government departments to prove his identity. But the documents have inconsistencies in his name and different dates of birth. Customer D isn’t sure which birth date is accurate. The bank isn’t sure which document, if any, it can use to identify him.

The bank assesses the money laundering/terrorism financing risk and decides to accept an alternative document to verify Customer D's identity. It asks him for copies of the government documents and for a reference from the president of the local Aboriginal Land Council (ALC) which states that he is the person named in all the documents. The president provides a reference on ALC letterhead that includes a photograph of Customer D. The bank uses this to verify his identity.

Flexible approach for customers experiencing family and domestic violence

AUSTRAC recommends setting up protocols to identify and verify customers who are experiencing or have experienced family and domestic violence when you can’t rely on conventional identification and verification methods.

There might also be times when customers who are experiencing or have experienced family and domestic violence produce identification documents that have expired or have a different address, or they do not have access to any identification documents in the short term.

It is essential that customers who are experiencing or have experienced family and domestic violence have a bank account independent of the individual they are seeking independence from as soon as possible.   

We recommend adopting a flexible approach while acting with sensitivity, respect and compassion.   

You may need to use ‘reliable and independent’ means of alternative identification such as a referee statement as outlined above.

Examples of considerations when assessing the money laundering/terrorism financing risk could include: 

  • Source of income e.g. Centrelink benefits / family and domestic violence grant, employer
  • Expected transactions on account (verifiable sources of income, predicable expenses)
  • Expected timeframe for producing standard identification documents (after a grace period)

Example 1

Customer E is experiencing domestic violence. Her partner does not allow her to have a bank account and holds her identification documents. Customer E fled to a refuge without any identification documents and needs to open a bank account. 

Customer E finds each application to replace identification documents takes over two weeks to process and often requires a form of identification to support each request which makes the process slow. It therefore may take months to get enough identification documents to open a bank account. Further complications arise as she requests the new identification documents to be sent to a different non-permanent address.   

The refuge director provides a reference to the bank, the bank assesses the money laundering/terrorism financing risk as low and opens the bank account requiring her to present standard identification documents within 90 days.

Example 2

Customer F is living with her brother who controls her finances and prevents her from working. She decides to flee her home.

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

The bank assesses the ML/TF risk as low and approves opening the account based on the photos. The bank requests that Customer F provide her identification documents as soon as practical.

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

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

Customer G 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 as low and uses the reference as a basis for opening the account.

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: 27 Aug 2021
Page ID: 232

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