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Comment by mark212 | Hacker News Reader

What this guide leaves out is the most important part: getting a bank account. I can’t speak to the process in the U.K. but in the United States the “know your customer” rules are quite strict and accounts for businesses are doubly so. Just having a set of incorporation papers won’t work and it can’t be done online (in my experience).

Having a duly registered company with fake directors gets you nowhere without a bank account.

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I used to be involved in a UK based startup (as a developer) where we would create a bank account for our customers as a part of the product.

The AML/KYC process was outsourced. The customer would go through the registration form, provide their details, and then we would hit up the third party AML/KYC API, which would come back with details on the additional information required.

We would then have to chase up the customer for this information (usually a picture of their passport/utility bill, that sort of thing) and provide this back to the third party handling AML/KYC, who would then give authorization to another third party to create the actual bank account.

The whole thing seemed ripe for abuse. After a bank account was created, at no point was the customer contacted by the third party to tell them a bank account had been created in their name. If I was malicious and knew somebodies address history, DOB and had a picture of their passport, I could create a bank account for them with a couple of API calls, and they wouldn't have a clue.

It used to be that to get a bank account you would have to physically go to the bank and meet a human being first, but we’ve moved away from that.

We were closely watched by, and regularly in touch with, the FCA who didn't have any problem with what we were doing.

FCA’s job is plausible deniability. Pre 2008 was regulatory arbitrage, begun under Tony Blair, who now has a nothing title at JPM. Gordon Brown, Alistair Darling and many others also took banking jobs after 2008, as did Stephanie Flanders, before this a BBC finance journalist.

I'm guessing that the bank account itself is outside the UK, just the corporate structure running through the UK.

For example one of the companies mentioned: https://beta.companieshouse.gov.uk/company/OC364391/filing-h... : the two "members" of the limited liability partnership are Marteza Alliance Ltd and Dorado Group Ltd, both Seychelles registered companies.

In the unlikely event of the government wanting to fix this, I frankly think they should (a) ban the use of LLP by anyone other than natural persons and (b) blacklist all the tax evasion jurisdictions entirely. They will never do the latter but might be persuaded to move on the former.

> getting a bank account. I can’t speak to the process in the U.K. but in the United States the “know your customer” rules are quite strict and accounts for businesses are doubly so. Just having a set of incorporation papers won’t work and it can’t be done online (in my experience).

This would really hurt the online-only banks if it were true. I opened a (personal) Capital One account online.

https://en.wikipedia.org/wiki/Direct_bank

You need to submit a passport picture though. It's probably easier to fake a badly lit picture of a passport than an actual passport though...

Lots of people post their passport photos when travelling on instagram, you could quite easily "borrow" one of them to send to the bank.

Not for all of them. All I had to do to get a Starling account was send them a video of me saying my company name

I have opened many online bank accounts using only my social security number. I open bank accounts frequently for the sign up bonuses and haven't ever been asked to submit photo ID online.

I got a US bank account by visiting the bank. No questions asked. So did my friend (different bank and state). I think you are over-estimating the KYC or visiting the more reasonable branches.

Lots of branches in NY will be more than happy to open a bank account for you and give you a credit card if you have 1500-2000 US dollars.

You can buy a company with a bank account for a few thousand.

You can buy an offshore bank not too much more

https://www.eternitylaw.net/info/litsenzii/offshore-bank-lic...

http://www.bankinglicensing.com/how-to-purchase-a-bank/banks...

For not too much more, you can buy a shell bank in a much more established economy or had one created for you.

All those draconian AML rules on individuals make no sense in light of that.

Effectively, a lot of rules keep individuals honest, but let bigger entities run wild at their expense.

It’s Unfair to say the least!

Exactly. Obtaining a bank account requires person's ID and tax number. Even if you would know the private tax number, the person in question would get a high income tax and would start to investigate.

My understanding is, the purpose of these companies with fictional founders is for founding/owning other companies registered elsewhere. The article does mention that the chain of ownership crosses many borders and can become practically impenetrable or very expensive and time consuming to investigate.

So let's say, somewhere in the chain of onwership there are some real unsuspecting people, possibly accounting agencies, managing real banking accounts. By the time you find them the money will be gone, the agencies will disappear, the occupants of the registered postal addresses will be different. You are going to need a lot of official inquiries in multiple countries to trace everything back to the source. It might prove to be almost impossible to do.

Or by the time you finish your investigation Putin himself will be gone.

I suppose things have changed a bit since I moved to the UK, but in my experience, the US is infinitely better than than the UK is terms of banking. It was quite easy to open up a business bank account in the US - took one day. Here, it is still hell to open up an initial personal bank account - passport, the residence permits, the proof of address... A few weeks at least. Once you are in the system, it does get a bit easier, but the UK system is still tied to the concept of you're associated with a specific branch at a specific location - it is like the 1950s in some ways. Larger banks are sort of more efficient, but it is not the US at all.

As a UK citizen, that last part doesn't seem true for my personal banking. Once you have an account it's very easy to open others at different banks.

Just recently I opened a secondary account with an app only bank. Other finance apps can simply use the API to help you keep track of your own spending, etc.

Of course immigrants may have additional hurdles with banking in the UK, I don't know.

This was 12 years ago, so things have changed, but man... when I first got here, landlords were wanting 6 months of rent upfront. The system was obviously designed (or it just came out that way) to make it hard for immigrants to initially establish themselves. These days, it is going to get a lot worse once Brexit happens.

Perhaps you misunderstood me or I wasn't clear - when I first got here, I tried to deposit a check into my account using another branch / office than the one I where I opened my account. I couldn't. It is not a matter of opening another account with _another_ bank. From the little I know of the banking system, things are or were not then, as wholly integrated as they were in the States. OTOH, the US is only now catching up to the rest of the world w/ Chip and PIN debt/credit cards....

I could certainly deposit checks in any bank branch 12 years ago in the UK. Your experience there seems weird. Even 12 years ago, no-one in the UK really used checks, so that might have something to do with it.

Opening an account is indeed unnecessarily difficult for immigrants, and UK landlords can get away with anything due to an almost total absence of regulation.

The UK system is also highly dependent on utility bills as a proof of address if you are an immigrant.

I've always been mystified by the idea that's taken hold in the UK that a utility bill is some kind of ID. As far as I can see, a modern utility bill could trivially be faked on a regular printer. (I assume that utility companies can't verify bills without violating data protection laws.)

It does elevate “oh, I made a mistake” to concrete fraud/forgery if there’s reason to go back and look into it.

I've always wondered if it would actually constitute fraud if you made a fake utility bill with your real address on it.

If you submitted that for reimbursement purposes, I'm sure it would.

If you submitted it for proof of address purposes and you have service from that utility in your name but with different consumption values, I would think it would not.

If you submitted it for proof of address purposes and you do not have service from that utility in your name, I would think it would be.

Yes, I mean in the proof of address case. It seems doubtful that providing a fake document with your real address could constitute fraud, if the document was being used solely to verify your address. But perhaps there is some other criminal offense of forgery or some such that is still applicable.

I opened my bank account 11 years ago (2008), and never had any issues doing anything I needed to do (including cheques) at another branches over 100 miles away.

Same here, but for significantly longer

I moved away from my hometown longer ago than that and had no problem depositing cheques in branches other than the one with which I was registered. It may depend on the bank you are using, or possibly even the method of deposit and the branch's ability to provide the resources for it.

I think the whole concept of “branches” is basically gone.

Except if the bank sells off a region (e.g. merges with another bank, but is required to sell off some operations for competition reasons), then you’ll end up following your home branch.

It used to be that the home branch would technically be responsible for verifying cheques, but i’m Sure that’s all centralized now too.

"still tied to the concept of you're associated with a specific branch at a specific location"

That hasn't been my experience for 15+ years.

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