Six common CDD mistakes (and how to avoid them)

The AMLHUB outsourcing team manages the outsourcing for many New Zealand reporting entities. We have good oversight over the things that go right, and the ways it can go wrong.

Keep reading to learn about the six most common mistakes made in customer due diligence (CDD), and how you can avoid them. Plus, download your copy of the ID Document Guide.

This blog was updated 12 February, 2024.

Claudia Wilson
AML Compliance Officer

1. Out of date proof of address documents

Sometimes people try to use out-of-date proof of address documents. We recommend obtaining one of the below, issued within the last 12 months, as proof of address:

• Council rates notice/valuation (best option)
• Water rates bill (best option)
• Registered NZ bank (best option)
• LTNZ car registration document (best option)
• Residential rental agreement
• Utility bill - power, phone...etc
• Insurance policy document

Nicola Wilkins
Senior Compliance Officer

2. Out-of-date ID certifications

Out-of-date ID certifications is a problem that sometimes pops up. Typically, people will get their ID certified for one reason or another and then keep that document for future ID verification requests. This is fine if the certification was completed within the last 3 months, but often they are not.

Our recommendation is to keep an eye out for the certification date, and if it falls outside the accepted range of three months, advise your clients that they will need to get it recertified.

Rick Smith
AML Compliance Officer

3. Missing 'true likeness' statement

When identifying an individual outside of electronic means, (e.g. using certified documents) there needs to be a ‘true likeness’ statement. When there is no ‘true likeness’ statement, the implication is that the certifier has seen the document but not the actual person. This means there is no way of knowing if the photo is a true likeness, which is a fundamental part of CDD. Remember to check that any certification has the correct wording – this will make client verification faster and compliant.

Ivona Velkovski
AML Compliance Officer

4. Using non-original copies of ID

Sometimes people use non-original copies of ID when providing an ID sighting, instead of the original document. We usually encounter this as a photo of the ID taken over video call, or when a client is asked to scan their ID and send it through without it being seen in person (see above).

If you’re not able to see a client and their ID in person, we recommend using electronic identity verification tools, for example RealMe or AMLHUB’s remote EIV feature. If you’re having trouble uploading photos to the AMLHUB, you can also reach out to one of our team for help.

Bek Fazilov
AML Compliance Officer

5. Name disparity across documents

When people change their name, or have an alternative name, this can often lead to discrepancies between documents. For example, the passport will have one name and the proof of address will have another. This is fine when there is a supporting document to explain the difference. If the names don’t match, the person performing CDD will need to see a linking document (e.g. marriage certificate) to confirm the person is the same. Requesting this as soon as the name discrepancy is identified helps to speed up the whole CDD process.

Charlie Wilson
AML Compliance Officer

6. Not confirming a trust

At the outset of identifying beneficial owners, it’s helpful to ask if a trust is involved. Asking this one question can make the process CDD much faster, as it gives your clients the opportunity to give you those documents right at the outset. It also lets the AMLHUB outsourcing team know right away whether we need to request trust information or not.

Download the ID Document Guide

Get your copy of the acceptable combinations of ID and proof of address for performing CDD.  Fill out the form below to download.