New Anti-Money Laundering and Counter-Terrorism Financing (AML/CTF) laws were passed in Australia in December 2006 and have been gradually phased in since then. The introduction of the laws are aimed at bringing Australia into line with international AML/CTF standards which are designed to combat money laundering and terrorism financing, and assist law enforcement to identify criminals.
The laws impact all financial institutions (including PayPal Australia), as well as other sectors such as the gambling sector, real estate agents, jewellers, solicitors, accountants and bullion dealers.
How is PayPal Australia affected?
PayPal is required to obtain Proof of Identity documents from certain account holders. This is similar to the 100 point check banks do when you open a bank account; the difference is that for the majority of customers PayPal collects this information only when your account balance reaches a certain level.
How are PayPal Australia’s customers affected?
Not all PayPal customers will be impacted, it only affects customers who have signed up on or after 12th December 2007.
For most accounts affected, PayPal is required to authenticate the identity of account holders when the account balance reaches A$1,000. However, for some entities PayPal is required to do this as soon as the account is opened. PayPal is also required to place a partial limit on your account until the Proof of Identity process has been completed.
For your convenience, PayPal will attempt to authenticate your identity before your account balance reaches A$1,000. If we are able to authenticate your identity before your account balance reaches A$1,000 we will not need to limit your account. Unfortunately it is not always possible to do this, especially if your account balance reaches A$1,000 very quickly.
To help make this process as easy as possible, please:
• ensure your account details such as name and address, are correct and up to date; and
• review the list of required documents below and check that you can provide them. The information on your documentation must correspond with the information registered on your PayPal account.
Being asked to provide Proof of Identity documents does not mean that you are considered to have taken part in any illegal activity; it simply means your account has reached the designated balance and your identity needs to be authenticated.
It’s very important to make sure that when you sign up for a PayPal account the correct entity type (e.g. individual, company, association) is selected as you may not able to change this easily. If you are unsure of the correct entity type, you should consult legal or tax guidance.
What is the process?
To make the process easier for our customers PayPal will attempt to authenticate the identity of account holders electronically via a third party service provider. This is a safe and secure process; the third party service provider will only validate basic information and does not keep your details. If this is successful no action will be required on your part.
If we cannot verify your identity electronically we may request you log-in to your PayPal account and securely review or update your existing information. We will also ask you to provide certain documents so that we can authenticate the details you have supplied on your PayPal account.
When you log on to your PayPal account you will be directed to the Resolution Centre where you will find instructions on how to complete the Proof of Identity process and what documents you need to provide to us.
Note: Please be on the lookout for emails pretending to be from PayPal and never reply directly to emails asking you to respond with passwords or personal information. The safest way is to type “www.paypal.com.au” in your browser and log-in as per normal.
What happens if you do not respond to the request to provide documentation?
If we have not authenticated your identity by the time your account balance reaches A$1,000, PayPal is legally required to place a low restriction on your account. This means you will not be able to make payments, withdraw funds or close your account.
This will remain in place until we are able to authenticate your identity. You will still be able to receive funds into your account.
If you do not respond within 45 days, this restriction will be escalated to a full restriction and you will not be able to make payments, withdraw funds or receive funds.
As soon as you have completed this Proof of Identity process your account can be returned to normal.
How will you know if you need to provide additional information or documentation?
We will place an alert on your account and also send you an email.
What documentation will PayPal be asking for?
The type of documents will depend on your account type (Personal, Premier or Business) and business or entity type, where applicable.
Click on the following links for details:
- Individual (personal or premier account)
- Sole Trader
- Partnership
- Proprietary Company
- Unlisted Public Company
- Listed Public Company and its subsidiaries
- Associations (Unincorporated or Incorporated)
- Government Bodies
How is your identity protected?
You privacy is important to PayPal. PayPal Australia is subject to the Privacy Act 1988 (Privacy Act). The Privacy Act regulates the collection, use, disclosure, quality and security of personal information. PayPal’s Privacy Policy also applies to its customers.
If you require more information on how your privacy will be protected by PayPal, please view ourPrivacy Policy.
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