--- title: What are some common Customer Due Diligence (CDD) mistakes? description: "What are some common Customer Due Diligence (CDD) mistakes - Mistake 1: Not Verifying Beneficial Owners \"I verified the company director, that's enough\" Problem." --- [Skip to content](https://knowledge.easyaml.com/what-are-some-common-customer-due-diligence-cdd-mistakes#main-content) English - Australia Show submenu for translations Open main navigation Close main navigation - English - Australia Show submenu for translations How can we help you? - There are no suggestions because the search field is empty. 1. [easyAML Help Centre](https://knowledge.easyaml.com/?hsLang=en-au) 2. [FAQs](https://knowledge.easyaml.com/faqs?hsLang=en-au) 3. [Customer Due Diligence (CDD)](https://knowledge.easyaml.com/faqs?hsLang=en-au#customer-due-diligence-cdd) # What are some common Customer Due Diligence (CDD) mistakes? ## Mistake 1: Not Verifying Beneficial Owners "I verified the company director, that's enough" Problem. **Mistake 1: Not Verifying Beneficial Owners** "I verified the company director, that's enough" **Problem:** The director might be a nominee for someone else. You must identify anyone with 25%+ ownership or control. **Fix:** Always ask "Who owns or controls this entity?" and verify those individuals. easyAML queries business registers to ensure you're getting the most accurate view of directors and beneficial owners. **Mistake 2: Accepting Poor Quality Documents** "The photo is blurry but I can kind of see them" **Problem:** You're responsible for adequate verification. Poor quality = inadequate verification. **Fix:** Insist on clear, legible documents. easyAML ensures the clients submit legible documents and verifies them for you! **Mistake 3: Verifying Too Early** "I verified them when they first inquired, 6 months ago" **Problem:** Verification must be done before providing the service. Old verification might be outdated. **Fix:** Verify immediately before or at the time of providing services. If time has passed, refresh your checks. **Mistake 4: Not Understanding Transaction Purpose** "They're buying property, that's all I need to know" **Problem:** You need to understand WHY they're buying, with whose money, for what purpose. **Fix:** Ask questions. Understand the full context. Document their answers. **Mistake 5: Same CDD for Everyone** "I use the same checklist for all clients" **Problem:** High-risk clients need enhanced checks. One-size-fits-all is inadequate. **Fix:** Risk-assess each client and tailor your CDD to their risk level. easyAML automatically classes a clients risk based on a number of factors. **Mistake 6: Not Documenting the Process** "I definitely checked their ID, I just didn't write it down" **Problem:** If you can't prove you did CDD, AUSTRAC treats it as if you didn't. **Fix:** Document everything. Keep records for 7 years. **Mistake 7: Trusting Client's Word** "They seem honest, I don't need to verify" **Problem:** Criminals often seem trustworthy and professional. That's how they succeed. **Fix:** ALWAYS verify. Trust but verify. Your gut feeling isn't CDD. **Mistake 8: Ignoring Red Flags** "Something seemed off but I didn't want to be rude by asking more questions" **Problem:** Red flags require investigation. Ignoring them can lead to facilitating money laundering. **Fix:** If something doesn't add up, ask more questions. It's your job, not rudeness. ### Related articles - [What are common staff training mistakes?](https://knowledge.easyaml.com/common-training-mistakes?hsLang=en-au) - [What if I get AML wrong?](https://knowledge.easyaml.com/what-if-i-get-aml-wrong?hsLang=en-au) - [What if someone else has done the CDD on my client?](https://knowledge.easyaml.com/what-if-someone-else-has-done-the-cdd-on-my-client?hsLang=en-au) - [What are common Politically Exposed Person (PEP) screening mistakes?](https://knowledge.easyaml.com/what-are-common-politically-exposed-person-pep-screening-mistakes?hsLang=en-au) - [What is Customer Due Diligence (CDD)?](https://knowledge.easyaml.com/what-is-customer-due-diligence-cdd?hsLang=en-au) - [easyAML Set-up Checklist](https://knowledge.easyaml.com/easyaml-set-up-checklist?hsLang=en-au) - [Training Videos](https://knowledge.easyaml.com/training-videos?hsLang=en-au#main-content) - [Register for Upcoming Webinars](https://knowledge.easyaml.com/training-videos?hsLang=en-au#register-for-upcoming-webinars) - [Previously Recorded Webinars](https://knowledge.easyaml.com/training-videos?hsLang=en-au#previously-recorded-webinars) - [FAQs](https://knowledge.easyaml.com/faqs?hsLang=en-au#main-content) - [General](https://knowledge.easyaml.com/faqs?hsLang=en-au#general) - [AML/CTF basics](https://knowledge.easyaml.com/faqs?hsLang=en-au#aml-ctf-basics) - [Getting started](https://knowledge.easyaml.com/faqs?hsLang=en-au#getting-started) - [Compliance Program](https://knowledge.easyaml.com/faqs?hsLang=en-au#compliance-program) - [Customer Due Diligence (CDD)](https://knowledge.easyaml.com/faqs?hsLang=en-au#customer-due-diligence-cdd) - [Training](https://knowledge.easyaml.com/faqs?hsLang=en-au#training) - [Reporting](https://knowledge.easyaml.com/faqs?hsLang=en-au#reporting) - [Sector Coverage](https://knowledge.easyaml.com/faqs?hsLang=en-au#sector-coverage) - [Pricing & Plans](https://knowledge.easyaml.com/faqs?hsLang=en-au#pricing-plans) - [Sales & Onboarding](https://knowledge.easyaml.com/faqs?hsLang=en-au#sales-onboarding) - [Trusts & Complex Structures](https://knowledge.easyaml.com/faqs?hsLang=en-au#trusts-complex-structures) - [Reliance & KYC Sharing](https://knowledge.easyaml.com/faqs?hsLang=en-au#reliance-kyc-sharing) - [ACMA SMS Sender ID Register](https://knowledge.easyaml.com/faqs?hsLang=en-au#acma-sms-sender-id-register) - [Quick Answers](https://knowledge.easyaml.com/faqs?hsLang=en-au#quick-answers) - [How-to Guides](https://knowledge.easyaml.com/how-to-guides?hsLang=en-au#main-content) - [Tasks](https://knowledge.easyaml.com/how-to-guides?hsLang=en-au#tasks) - [Transactions](https://knowledge.easyaml.com/how-to-guides?hsLang=en-au#transactions) - [Entities](https://knowledge.easyaml.com/how-to-guides?hsLang=en-au#entities) - [Insights](https://knowledge.easyaml.com/how-to-guides?hsLang=en-au#insights) - [Training](https://knowledge.easyaml.com/how-to-guides?hsLang=en-au#training) - [Compliance](https://knowledge.easyaml.com/how-to-guides?hsLang=en-au#compliance) - [Reports](https://knowledge.easyaml.com/how-to-guides?hsLang=en-au#reports) - [Account Settings](https://knowledge.easyaml.com/how-to-guides?hsLang=en-au#account-settings) - [Billing & Plans](https://knowledge.easyaml.com/how-to-guides?hsLang=en-au#billing-plans) - [KYC Information](https://knowledge.easyaml.com/kyc-information?hsLang=en-au#main-content) - [Client Resources](https://knowledge.easyaml.com/kyc-information?hsLang=en-au#client-resources) - [Person being verified](https://knowledge.easyaml.com/kyc-information?hsLang=en-au#person-being-verified) - [Glossary](https://knowledge.easyaml.com/glossary?hsLang=en-au) - [Integrations](https://knowledge.easyaml.com/integrations?hsLang=en-au#main-content) - [General](https://knowledge.easyaml.com/integrations?hsLang=en-au#general) - [Action Step](https://knowledge.easyaml.com/integrations?hsLang=en-au#action-step) - [Clio](https://knowledge.easyaml.com/integrations?hsLang=en-au#clio) - [XPM](https://knowledge.easyaml.com/integrations?hsLang=en-au#xpm) - [Scantek](https://knowledge.easyaml.com/integrations?hsLang=en-au#scantek) - [News Feed](https://knowledge.easyaml.com/news-feed?hsLang=en-au#main-content) - [Latest Release Notes](https://knowledge.easyaml.com/news-feed?hsLang=en-au#latest-release-notes) - [Support](https://knowledge.easyaml.com/support?hsLang=en-au) [![easyAML-Logo\_Magenta](https://knowledge.easyaml.com/hs-fs/hubfs/easyAML-Logo_Magenta.png?width=200&height=47&name=easyAML-Logo_Magenta.png "easyAML-Logo_Magenta")](https://easyaml.com/) Copyright © 2026, easyAML