Refusing to onboard a customer can take place at different points in the customer cycle. The company may choose to not accept a new customer because after conducting customer due diligence, you discover the customer is outside of your organization’s risk appetite. Or the customer might have raised enough red flags for financial crime or for violation or circumvention of sanctions
The company may also decide to reject an existing customer after a standard review cycle, either because their activities look suspicious, or because your organization’s risk appetite has changed.
If, for example, the company does not accept online casinos as customers, it is safe to say and document the reason. If there are underlying suspicions of financial crime, violations or circumvention of sanctions, you must take care not to tip off the customer.
Potential new customers who fail your organization’s CDD (Customer Due Diligence) or are outside of the stated risk appetite are the simplest to reject. If it is a risk appetite matter, such as not accepting certain sectors, it is safe to tell the potential customer. If it is because of financial crime suspicions, care must be taken not to tip off the customer. A simple explanation of “outside of risk appetite” should be sufficient. If you do reject a new customer, you must keep a file stating your reasons. If you suspect financial crime, your company must make the necessary suspicious activity reports.
Rejecting an established customer requires additional steps. If your company has decided to exit a sector or jurisdiction, there might be a press release or standard statement and customer communications that can be used to inform the customer of the decision.
Rejecting a customer because of suspicious activity is more difficult. You should follow your organization’s policies and procedures. It should be followed by a very generic letter or communication saying the organization wishes to discontinue the relationship. Your company might have a template for this communication. Unless legally required to do otherwise, you must allow your customer a reasonable amount of time to make alternative arrangements before terminating the cooperation.
Atbilst team