KYC to CYA....4 Steps to avoid 90% of frauds

Before you jump to conclusions...CYA refers to Cover Your Assets! And KYC refers to Know Your Customer.

Gerald Dent, RMA Chair, puts some great practical wisdom in his RMA Leadership Letters found in the front pages of each RMA Journal. Here is the abbreviated list for this tried and true defense against fraud.

1. Ask for identification if you don't personally know the individuals signing documents. Meet them all.
   
2. Visit the borrower's place of business when the borrower is present.
   
1. Inspect the property.
2. Meet key employees.
3. Talk with the owner about their plans. (They'll like that!)
   
3. Never communicate through an intermediary, like the corporate accountant, on important aspects of the credit.
4. Don't take shortcuts to meet production goals.

It turns out that one of the most important tools to spot and avoid fraud is also one of the most important tools to develop and strengthen borrower relationships...Know Your Customer.

The 90% in the blog title is Mr. Dent's guess...what do you think? What other ideas do you have for knowing your customer?