@Joshua Mangan,
I think the main issue is the disconnect between Flippa and your customers. Flippa is very quick to suspend and/or ban. Even a request to get a user verified will get an account suspended / banned. This is very disruptive to ongoing bidding and auctions.
In addition, Flippa and Flippa Escrow seems to be conducting customer identity verification independently. A customer who is properly verified by Flippa may need to face another around of verification by Flippa Escrow. Instead of Knowing Your Customer, it seems that the organisation does not know the customer at all, and seems to require many verifications. With many verifications along the way, we customers sometimes wonder whether did Flippa store our previous submitted records properly. If not, why the constant need for verification from time to time?
Furthermore, some of these verifications occur just when a transaction is done, after the customer requests for the release of funds.
All these only bring about unpleasant experiences for your customers. There seems to be no/little trust from the organisation, despite some of us completing many transactions prior.
Regarding a financial institution's AML KYC program, verifying the identity of customer usually is done
when a new customer signs up, not after a transaction is completed, and especially not prior to release of funds. Existing verified customers usually do not need their identity verified again.
Also, a financial institution
does not need to establish the accuracy of
every element of CIP-identifying information that is obtained from the client. However, it must verify enough information to form a
reasonable belief that it knows the true identity of the customer.
That is why many of us are puzzled why Flippa as an organisation require so many levels and layers of verification, from full name, email address, social media, mobile number, credit card charge, PayPal account, to image of photo ID, selfie holding photo ID, bank account details, and SMS 2FA. You mentioned this is an industrial standard which is highly regulated, yet it seems only Flippa and AirBnB are complying with them. Why other financial institutions like escrow.com, PayPal, and even other domain marketplaces like Sedo, GoDaddy, etc do not have such high standards in the same industries?
You added that Flippa and Flippa Escrow are separate entity. Yet Flippa Escrow has the power / authority to suspend / ban a user due to their own verification requirements. Flippa Escrow even quoted the
Flippa Terms and Conditions 3.1.h that we users agree to provide Flippa with all identification documents which Flippa requests from us
from time to time for the purposes of
verifying our identity. Doesn't seems separate to many of us.
There are two methods of verification to gain reasonable belief that the financial institution knows the true identity of a customer: documentary and non-documentary method.
Identity Verification for Individuals (Documentary Method)
To verify the
identity and
nationality of an individual, the AML/onboarding staff should review
any of the unexpired government-issued identification cards or reputable agency-issued (i.e., DMV and IRS) documentation below:
- Driver’s license
- State-issued ID
- Passport
- Consular identification cards
- Foreign driver’s license
- Original utility bill
- Notarized bank statement
- Tax bill
To verify the
address of an individual, the staff should review any of the below ID cards, which should include the individual’s current place of residence:
- Driver’s license
- State-issued ID
- Foreign driver’s license
Identity Verification for Individuals (Non-Documentary Method)
When conducting non-documentary verification, an AML staff member can:
- Validate the customer’s information using risk intelligence databases or platforms like World Check and LexisNexis
- Validate customer identity against fraud and bad check databases
- Check references (i.e., other banks and credit card companies)
- Contact the customer directly to conduct an inquiry and also validate a provided phone number
- Validate the customer’s identity against credit or consumer reports
- Request and review the customer’s financial statements
At no instance is a selfie holding a photo ID a recommended method as a means of identity verification for customers. Maybe this is the reason why other financial organisations like PayPal only require a photo ID and a matching utility bill to verify the identity, nationality and address of their customers. And I don't think other organisations will ban or suspend a user immediately when they require a verification.
If this is really the standard industry regulations, we should hear more similar unhappiness regarding usage of other marketplaces and or financial services, but in this forum, unhappiness arising from Flippa's verification seems to be recurring from time to time. It is also not surprising that some customers felt that Flippa is acting more stringent than a bank.
May I suggest that the verification processes of Flippa and Flippa Escrow be streamlined as one and to study how other marketplaces / escrow companies conduct their KYC.
Disclaimer: I'm not an expert in this field, but the above is my understanding after reading the 2 sources below as well as my verification experiences with PayPal and Flippa.
Sources:
http://www.advisoryhq.com/articles/cip-process-verify-customer-identity/
http://www.protiviti.com/en-US/Docu...-US-AML-Requirements-5thEdition-Protiviti.pdf (p71, 104, 107, 108)
