Your new client seems legitimate. Professional website. Plausible business story. Documents that look fine at first glance.
Then HMRC comes knocking.
Those documents were forged. That address doesn’t exist. You’ve just onboarded a money laundering operation. One verification shortcut has put your practice at risk. Penalties. Investigations. Reputational damage that takes years to repair.
This guide reveals the five ID verification mistakes that get accounting firms into trouble and shows you how to avoid them completely.
Key Takeaways for Busy Readers
- ID verification mistakes are expensive, with UK firms facing penalties up to £10 million for AML failures
- The most common errors include accepting expired documents, skipping cross-verification checks, applying inconsistent procedures, maintaining poor records, and failing to monitor clients ongoing
- Automated AML software eliminates human error and ensures consistent compliance across your entire client base
- FigsFlow streamlines the entire process, reducing verification time from hours to minutes whilst maintaining complete audit trails
What is AML & Why ID Verification Matters
Anti-Money Laundering regulations require UK firms to verify the identity of every client before establishing a business relationship. This isn’t just bureaucracy. It’s your first line of defence against financial crime.
ID verification under AML means confirming that your client is who they claim to be using reliable, independent documentation. You must collect, verify, and retain evidence of this process for at least five years.
The Financial Conduct Authority and HMRC regularly inspect firms’ ID verification procedures. Poor practices can result in significant fines, restrictions on your practice, or criminal prosecution in severe cases.
Getting ID verification right protects your firm, your clients, and the wider financial system from money laundering and terrorist financing.
AML Goes Beyond ID Verification
ID verification is just one requirement. Learn about risk assessments, ongoing monitoring, record-keeping obligations, and the complete AML compliance framework for UK accountants.
Read the Complete Guide: 2025 AML & Identity Verification Rules →
5 Common ID Verification Mistakes in AML
1. Accepting Poor Quality or Expired Documents
Many firms accept blurry photocopies, smartphone photos with glare, or documents that expired months ago. This fails the basic requirement for reliable ID verification evidence.
The regulations require clear, legible copies where all security features are visible. Expired documents don’t prove current identity and won’t satisfy regulators during inspections.
Always check expiry dates before accepting any identification document. Request new copies if the image quality prevents you from reading all details or verifying security features.
Digital verification tools can automatically flag expired documents and poor image quality, preventing these errors before they enter your system.
2. Failing to Verify Documents Against Multiple Data Sources
Relying on a single document or source leaves you vulnerable to sophisticated ID verification mistakes. A driving licence alone isn’t sufficient when other data sources are readily available.
Best practice requires verification against at least two independent sources. This might include electoral roll checks, credit reference data, or company registry searches for business clients.
Cross-referencing reveals inconsistencies that single-document checks miss. Different addresses, name variations, or dates of birth across sources should trigger enhanced scrutiny.
Failing to use available verification tools means you’re not taking reasonable steps to verify identity, which is a clear breach of AML requirements.
3. Inconsistent Application of Verification Procedures
Different staff members applying different standards creates compliance gaps and discrimination risks. One colleague might accept a utility bill whilst another insists on a bank statement.
Your firm needs documented procedures that every team member follows identically. This consistency ensures fair treatment and creates defensible audit trails.
Inconsistency often stems from unclear guidance or inadequate training. Staff should know exactly which documents are acceptable, how to verify them, and when to escalate concerns.
Regular file reviews help identify where practices diverge from your written procedures. Address training gaps immediately before they become systemic problems.
4. Inadequate Record-Keeping & Documentation
Storing incomplete records or failing to document your ID verification decisions leaves you exposed during regulatory inspections. You must prove you completed proper checks, not just claim you did.
Records should show what documents you obtained, how you verified them, when you completed the checks, and who performed the work. Missing any element weakens your entire compliance defence.
Many firms lose digital files, misfile paper documents, or delete records before the mandatory retention period expires. This makes it impossible to demonstrate compliance retrospectively.
Implement a structured filing system with clear retention schedules. Digital systems with automatic backups and retention management eliminate most record-keeping failures.
5. Neglecting Ongoing Monitoring & Re-verification
AML compliance doesn’t end after the initial verification. You must monitor the business relationship and re-verify identity when circumstances change or risks increase.
Many firms complete thorough initial checks then never review the client file again. This misses changes in risk profile, expired documents, or suspicious activity patterns.
Trigger events requiring re-verification include significant transaction changes, relocation to high-risk jurisdictions, adverse media reports, or simply the passage of time.
Set review dates in your client management system and build ongoing monitoring into your workflow. Annual reviews work for most clients, with more frequent checks for higher-risk relationships.
Introducing FigsFlow: Your Solution to ID Verification Errors
FigsFlow transforms ID verification mistakes from a manual, error-prone process into a streamlined compliance workflow. Here’s how it prevents the mistakes outlined in this guide.
- Secure Document Collection That Works
Clients receive a branded portal where they snap photos of documents using their mobile. FigsFlow stores everything securely in one place, eliminating lost files and incomplete records.
- Consistent Verification Standards
The platform guides your team through structured document review and data entry. All information is stored systematically, preventing the inconsistent application that creates compliance gaps.
- Instant Multi-Source Screening
FigsFlow screens clients against sanctions lists, PEP databases, and adverse media in under 30 seconds. Set automated re-screening at custom intervals for continuous monitoring without manual effort.
- Built-in Risk Assessment Framework
Free risk assessment templates guide you through evaluating client risk factors. Senior management retains control over final risk ratings whilst the system documents every decision with timestamps.
- Complete AML Reports Ready for Inspection
Generate timestamped AML compliance reports for each client with one click. Every document, screening result, and approval is recorded automatically, creating complete audit trails regulators expect.
Beyond AML compliance, FigsFlow is the only platform that unifies your entire client journey in one place. Handle proposals, pricing, engagement letters, and compliant e-signatures alongside complete AML workflows from document collection through ongoing monitoring.
Stop juggling multiple systems and spreadsheets. FigsFlow gives you everything you need to onboard clients professionally whilst maintaining bulletproof compliance records that satisfy any inspection.
You’ve seen the five mistakes that put accounting practices at risk. You know the consequences of getting ID verification wrong.
FigsFlow could be the solution that transforms your entire compliance workflow. Try it free for 30 days. Complete your first AML check in minutes. See if it’s the answer you’ve been looking for.
Additional Resources
- HMRC Economic Crime Supervision Handbook: Economic Crime Supervision Handbook – HMRC internal manual – GOV.UK
- Joint Money Laundering Steering Group Guidance: Current Guidance – JMLSG
- HMRC “Understanding Risks and Taking Action” Guidance: Who needs to register for money laundering supervision – GOV.UK
- FATF High-Risk Jurisdictions Lists: “Black and grey” lists
- Person with Significant Control (PSC) Explained: Person with Significant Control (PSC) Explained – FigsFlow
- Top 6 AML Software for Accountants in 2025: Top 6 AML Software for Accountants in 2025 – FigsFlow
Conclusion
ID verification mistakes expose your firm to regulatory penalties, reputational damage, and criminal liability. These five ID verification mistakes outlined above account for most AML failures in the accounting sector.
The good news is that every mistake in this guide is preventable. Review your current procedures against these common pitfalls. Train your team on consistent standards. Implement proper documentation and monitoring systems.
Get ID verification right and you protect your practice, satisfy regulators, and build client trust that lasts for years.
Ready to eliminate these errors from your practice?
Book a FigsFlow demo to see how automated compliance protects your firm.
Frequently Asked Questions
Acceptable documents include valid passports, UK driving licences, national identity cards from EEA countries, and biometric residence permits. You also need proof of address such as utility bills, bank statements, or council tax bills. Always verify documents are current and contain clear photographs where applicable.
There’s no fixed timeframe, but best practice suggests annual reviews for standard-risk clients. You must re-verify when there are significant changes to the business relationship, changes in client circumstances, concerns about previously obtained information, or when transactions become inconsistent with your knowledge of the client.
Yes, electronic copies are acceptable if they’re clear, legible, and show all security features. However, you must be satisfied the copies are authentic and represent the original document accurately. Using certified digital verification services provides stronger evidence than simple email attachments or smartphone photos.
UK firms face unlimited fines for AML breaches, with actual penalties determined by turnover, severity, and duration of non-compliance. Beyond financial penalties, you risk practice restrictions, public censure, criminal prosecution, and significant reputational damage. Individual accountable persons can also face personal fines and imprisonment for serious failures.
Yes, you must apply current standards to all ongoing client relationships regardless of when they started. Conduct risk-based reviews of existing clients, prioritising higher-risk relationships first. Most firms phase this work over 12-24 months, but don’t delay verification for clients involved in significant transactions or showing risk indicators.
English (UK) 
English