Which of the following is a red flag indicator for the client?

• A. Overly secretive
• B. Uses transparent background check
• C. Fully cooperative and documents provided
• D. Maintains clear and regular contact

Answer: (B)

Onboarding risk comes from behaviors that raise questions about what the client is trying to hide or control. When a client asks for a background check to be “transparent,” it can signal a readiness to see exactly what is being checked and potentially contest or steer the results. That can undermine the objectivity of due diligence and may indicate an attempt to influence the process or mask issues that would otherwise be uncovered. In AML practice, such insistence on total visibility into the verification steps can be treated as a red flag because it hints at possible evasion or manipulation of the screening, rather than straightforward compliance. By contrast, being cooperative, providing necessary documents, and maintaining regular contact are positive indicators that support proper due diligence.