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I've been paying into the same UK pension policy regularly for about ten years. All of a sudden, the pension provider is returning this year's payments and refusing to accept further payments. They have sent me letters informing me that they have taken this action in accordance with "a requirement of anti–money laundering legislation". I called them to ask for further details and they told me that my transactions had been flagged as suspicious because my most recent payment came from a different bank than the previous ones. This explanation is specious, because I've been using the same bank account to pay in, without any complaint from them, since 2014. They advised me to instead pay in from the bank account I had been using before 2014. I did this but they have now rejected that payment as well, for the same reason.

I'm a bit miffed because all these rejected payments are blocking the growth of my pension fund, and because to start accepting payments again, they want me to send notarized identity documents, which will cost me €25. (I can't attend the pension provider's offices in person as I'm currently overseas.)

My question, then, is as follows: In what circumstances does the UK's anti–money laundering legislation actually require pension providers to reconfirm their customers' identity? Is there a set of government guidelines establishing what sort of transactions are suspicious, or can pension providers set their own criteria? And regardless of who sets the criteria, what recourse, if any, do I have if I believe (as in this case) that they have not been applied properly? That is, what prevents pension providers from repeatedly sending out frivolous or erroneous identity confirmation requests?

I intend to contact my provider again to complain about this situation, but it would be nice to know in advance what my rights and their obligations are.

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Regardless of UK Money Laundering Laws - All companies have a responsibility under the Data Protection Act to ensure that all data kept is necessary and accurate - and so they can actually ask you to send up-to-date information* in any time period that they deem reasonable to ensure they are compliant with the act.

That being said, most payment systems these days are automated and use algorithms to try and find suspicious activity. Using multiple accounts will definitely be a red flag here, unfortunately, the advice to use your previous account will just be seen as yet another account switch by these algorithms and will probably look even more suspicious.

The main thing to remember is that ultimately these acts and regulations are there to protect you and your investment, so unless you have any suspicious that you're being asked for documents by a company or individual that you don't trust I would simply send them on and let them do their job.

As a side note - make sure you send anything of that nature in a recorded delivery so that you know exactly who handled it and when!


* So long as the information is necessary.

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