5 ms·
It’s not just that they don’t want it, it’s that they’re liable for it themselves if they should have known it was happening. Asking you adds one more small lay
by wrs 7mo ago
It’s not just that they don’t want it, it’s that they’re liable for it themselves if they should have known it was happening. Asking you adds one more small layer of “we discouraged illegal activity and we didn’t know about any”.
- janalsncm 7mo agoMaybe I am just slow. Bank 1 has the CYA clause and a cartel uses them for a decade for illegal purposes. Bank 2 does not have the clause and a cartel uses them for a decade for illegal purposes. In neither case does the clause prevent the illegal activity or make the bank any more or less aware of what customers are doing. They have to do KYC regardless of what the TOS says.
- anamexis 7mo agoThe point of the CYA clause isn’t to prevent illegal activity or make the bank more aware of what customers are doing. The point is that when Bank 1 is defending itself in court, it has one additional thing they can point at when arguing that it should not be liable for the illegal activities.
- janalsncm 7mo agoOk, fair enough. I just don’t think that is convincing evidence, personally. But there would be 11 other people on the jury.
- watwut 7mo agoThe bank that actually welcome the AlCapone will be first to have that form. If the court can be affected by something like that, it says something really bad about the legal system.
- lxgr 7mo agoIf this actually works in court, the corresponding legal system has completely lost the plot, in my view.
- pocksuppet 7mo agoThe CEO of bank 2 goes to prison because "you turned a blind eye to illegal activity"
- janalsncm 7mo agoAnd what about the CEO of bank 1?
- pocksuppet 7mo agoHis bank gets fined 3 minutes of revenue because "you turned a blind eye to illegal activity"
- stavros 7mo agoThe "cover your ass" clause is for the bank to cover its ass, not to prevent the crime.
- janalsncm 7mo agoThe point is, no judge or jury should be fooled into thinking putting “don’t do illegal stuff” in a TOS actually should matter. Forget the TOS. They allowed illegal activity.
- stavros 7mo agoThe point is they can claim they didn't know.
- lxgr 7mo agoYes, and any functional legal system would then tell them that asking the subject directly and explicitly whether they're trying to use your bank for money laundering does not count as "taking measures". If you have actual measures (such as asking for source of funds and then asking for proof if the evidence looks incongruent with what was stated), you have no need for the silly question; if you don't, the silly question won't save you either. This should go for both the asker and the subject of the question: Illegal things are already illegal. If a given legal system requires the silly question to be able to "tack on wire fraud charges" to something that would otherwise go unpunished(?!), I think what should be fixed is the legal system, not every single banking form.
- stavros 7mo agoYeah, this makes sense, it is a bit of CYA theater.