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CIP - Logical Verification
Answer by David Dickinson, BOL Guru
Guru Bios
Question:
Under CIP what would be considered "logical verification”?
Answer:
This is a very open-ended question. I could probably write 20 pages of examples. Logical Verifications include:
- Just conversing with the new customer to ask them why they chose the bank. Does it make sense based on their residence or employment?
- If they just moved to the area, ask why they moved to the area. I have had bankers tell me new customers mention working for a company that does not have a location in the city (IOW, they were not telling the truth).
- When someone has just moved to your area, compare the previous address listed on the customer's drivers license to the address on the credit report.
There are many, many more ways to perform logical verifications. The idea is that you are trying to determine if the new customer is presenting accurate information to the bank or providing inaccurate information to obtain an account.
First published on BankersOnline.com 2/26/07
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