MLR3C10120 - Business sector specific Guidance: Money Service Businesses: Specific Compliance Checks at a Cheque Cashers
Records can vary depending on the type and size of the business.
However, it is usual to see the following documentation:
- customer’s ID
- mandate forms
- computerised customer account
- daily summary records
- statement from franchisor detailing cheques banked
- banking records (for example bank statements)
Potential failures/weaknesses under MLR 2007
Due to the commercial procedures in place the risk of money laundering is low.
However, there are common failures/weaknesses and these are as follows:
Regulation 20 - Documented procedures usually concentrate on the commercial risks and therefore may not meet the requirements of regulation 20.
Regulation 8 - No evidence of ongoing monitoring of a business relationship. ID not refreshed and no evidence transactions have been scrutinised.
Regulation 14 - Business may accept cheques made payable to a limited company without applying any due diligence measures.
Regulation 21 - No documentation evidencing staff have received appropriate training.
The following show what type of transactions is normally accepted. It is not a definitive list but it contains information about the types of cheque that a cheque casher will usually consider cashing or is unlikely to cash.
Acceptable Types of Cheque Drawers (company, body or person who makes out the cheque)
Private Sector | Local Government | Central Government |
---|---|---|
Private Limited Companies | Metropolitan Boroughs | HMRC |
Public Limited Companies | County Councils | DWP |
Unlimited partnerships | District Councils | HM Paymaster General |
Individual Business Accounts | Town Councils | Post Office Counters |
Pension Funds | Agencies of the above | Any Nationalised Industry |
Bank or Building Society | - | Any Government Agency |
Mutual Company of any kind | - | Giro Cheques (where crossed) |
Benevolent Funds | - | - |
Unacceptable types of Cheque Drawers
Most cheque cashers will not be willing to accept cheques where the drawer is:
- a private individual unless they are also the payee.
- a giro cheque with an open crossing (these can be freely cashed at a Post Office).
- Limited companies.
Acceptable type of Cheque Payee (person cashing the cheque)
- private individuals
- married couples or joint payees
- partnerships.
Unacceptable type of Cheque Payee
- Cheques in favour of a private individual where the drawer is also a private individual unless they are the same.
- Giro cheques with an open crossing (these can be freely cashed at a Post Office)