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When card issuers try to attract potential customers with all sorts of rewards, you might think it’s a win-win situation when you apply for a credit card. As reader Mika found out, this is not always the case.
Mica has been approved for AAA dollar online Mastercard. The US bank that issues the card wanted to verify the applicant’s information and asked Mika to provide copies of all of the following documents:
- Driver’s license
- Mortgage Application
- Social security card
- Social Security Form 4506-T
- payment receipt
- Federal income tax return for the last two years
Given that this is a significant amount of information that the issuer is asking for, Mika wonders if this is customary or legal.
Documentation requirements vary
Mika, after discussions with this issuer, the spokesperson said that in general, most Mastercard AAA Dollars applicants do not need to provide any documentation. He added that “we may request certain documentation to help verify an applicant’s identity or qualify them for a specific credit limit.”
Similar rules apply to other card issuers. A Chase spokesperson explained that documentary requirements vary from case to case.
“While additional documentation is not always required, it may vary depending on the type of product (consumer or business) as well as other information that may be needed to prevent fraud,” the spokesperson said.
An American Express spokesperson noted that card applicants must provide their US address, US phone number, tax identification number or valid government-issued ID, as well as information about their income, employment, and financial assets.
Amex will then request documentation from its applicants to support this information “on a case-by-case basis”, with card approval subject to “standard Amex credit and fraud checks”.
Know your client’s requirements
Card issuers have introduced all of these data entry requirements because federal law requires them to receive information from their prospects and verify and record it. That’s why they ask for all your personal details when you apply.
It’s pretty standard. The documentation requirement for backing up this information is more subjective and is based on the specific policies of each issuer and the judgment of the person processing the application.
The requirement to obtain information from customers is based on the so-called “know your customers” provision of the US Patriot Act. This ruling aims to stop terrorists before they act and to punish acts of terrorism. Given that money is a vital fuel for terrorism, the government’s goal is to make it harder for terrorists to obtain funding or launder money through financial institutions.
To this end, the law establishes the basic standards that financial institutions must follow when a client opens an account with them. Given that the law only establishes a baseline for verification, how stricter it will be depends on each institution. This is why card issuers’ policies regarding applicant documentation run the gamut.
Decide if it’s worth it
Micah, it seems you have somehow confused the US bank verification process based on what you provided during the application process. It’s up to you if you want to go through that issuer’s underwriting hoops and provide this documentation in order to take advantage of the AAA Dollars Mastercard.
You may decide that continuing the application process for that particular card is not worth your time and effort. Of course, there are several card issuers that are fighting for your dollars. In any case, the subsequent underwriting support with the request for these documents, although not always usual, is certainly not inappropriate.
bottom line
When applying for a credit card, you will be asked to provide certain personal information. The US Patriot Act contains a “know your customers” provision that requires banks to obtain certain information from potential customers and verify inputs in order to deter terrorists.
Each bank has its own policy regarding what types of documentation may be required from you to verify the information you provide. Underwriters also act at their own discretion. You can decide for yourself whether what the card offers is worth providing, sometimes extensive, information requested by the issuer.
Contact me on [email protected] with your credit card related questions.
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The editorial content on this page is based solely on the objective judgment of our contributors and is not based on advertising. It was not provided or ordered by credit card issuers. However, we may receive compensation when you click on links to our partners’ products.
