A reader wrote in this week with a frightening story. One of their clients was the subject of a "black" (covert) effort by a competitor to place large amounts of negative information on the web. The results were that not only was a proposed banking relationship spoiled, the current one was placed in danger of termination. That's how powerful the Internet has become, and that's why it cannot be your primary compliance vetting tool. Only the experts can separate the wheat from the chaff.

A few important things to consider:

• Fraudsters and other financial criminals know how to stuff the Internet with positive entries, and thereby moving negative stories to back pages. Remember my rule: always look at ALL the entries, not just the first page, when looking for Internet stories about a subject of your enquiries. If you need details on this technique, see my recent article: Alias Smith and Johannes; How the Crooks are trying to derail Internet Due Diligence, Australian Financial Markets Association AML Newsletter, February-March 2007 at page 12.  http://www.afma.com.au/afmawr/pdf/aml-febmar-final-v2.pdf
  

• Criminal financial organisations, having a large budget for operations, can pay journalists to file what appear to be news articles, but are in reality "infomercials," designed to bolster their reputation. News articles must be from primary, well-known, mainstream newspapers. Can you tell the difference? Only a trained researcher with experience in verifying information from alternative sources can ferret out the pretenders.
  

• Blogs, electronic bulletin boards, company & personal websites, public relations firm press releases posted to commercial pr websites, can all boost the virtues of a financial criminal.
  

• Many fraudsters make substantial contributions to, and even sponsor at great cost, charitable events, which result in the appearance of flattering articles and photographs on charity websites, and in newspapers and magazines.

Are you starting to get the picture yet ? Do not make the Internet your most important arbiter of the bona fides of a prospective bank client. You can be fooled; I strongly suggest you World-Check the customer first,  and regularly update your information by re-checking the client periodically.