Question

After a customer completed the new account forms for a broker-dealer, she was informed that they were rejected and returned. The client's birth date provided on the form did not match the information provided under the Customer Identification Program (CIP) procedures of the broker-dealer. What should be done next?

- Report the client for potential money laundering.
- Escalate the issue to the broker-dealer's compliance department.
- Check the client's social media account to confirm her birth date.
- Open the account using the information provided on the account document.

Answer 1

The broker-dealer should reach out to the customer to resolve the discrepancy and verify their identity before opening the account.

Step-by-step explanation:

In this situation, it would be necessary to address the mismatch between the birth date provided on the account form and the information obtained through Customer Identification Program (CIP) procedures. This discrepancy can be a potential red flag for identity theft or fraudulent activity, so it is important for the broker-dealer to verify the customer's identity before opening an account. The next step would be to reach out to the customer and request additional documentation or clarification to resolve the discrepancy.

For instance, the broker-dealer could ask the customer to provide a copy of a government-issued identification document, such as a driver's license or passport, that confirms their correct birth date. By verifying the customer's identity using a reliable and trusted source, the broker-dealer can ensure compliance with regulations and safeguard against potential fraud.

Once the appropriate documentation has been provided to confirm the customer's identity and align the birth date with CIP guidelines, the broker-dealer can proceed with opening the account using the information provided on the account document.