Auction houses have been issuing 1099s for some time, closing a loophole. But today I was paying for a purchase and they wanted a copy of an official ID such as a driver’s license, saying it was now standard practice for all auction houses.
A couple of reasons for refusing. One was the risk of being hacked. I can deal with credit cards being hacked, but an ID is far more worrying, and hacking does happen to far more secure companies.
The other reason is philosophical; that I have to prove that I am not a criminal trying to launder money. Guilty until I prove myself innocent.
I have to say they waived the ID as it was a small purchase, and they were very nice about it.
So my friends; if you want to launder money, avoid auction houses, and go your local merchant. You will then have the interesting problem of finding a way to make your liquid liquid.
Is there any real opportunity for an auction house to structure payments differently to ease some of these concerns? My understanding is that 1099-K reporting applies when a third-party processor (credit cards, PayPal, etc.) handles settlement, but auction houses also have to issue other 1099s when paying consignors directly.
If an auction service limited itself to checks and handled settlement in-house, would that meaningfully change the reporting or ID requirements? I realize AML and tax compliance still apply regardless, but I wonder if a slightly slower process (waiting a few days for checks to clear) could be worthwhile if it made the experience feel less intrusive and maybe even attracted larger cellars.
In short: would sticking to checks change anything meaningful on the reporting/ID front, or are AML/tax rules going to catch it either way?
Assuming it was Bonham Skinner, yeah? I received the same request today, although i didnt mind providing it (but now you have me second guessing myself, ha! )
I wonder what recourse the auction house has if you refuse? Canceling the sale doesn’t seem like a viable option for them. Can they keep your money and the wine?
A few French auction houses has asked for ID besides credit card info when placing a bid, for a while. I suspect over here it’s more a case of being liable for your bid? Highly annoying.
I mean…i guess! I sent a pic of my license which has literally the same info that I’ve already given them. Maybe I’m nieve, but im just not that worried about it
Around here even folks with rather gray hair typically have to show an ID to random grocery store clerks to buy any alcohol, and to Fedex to receive an alcohol shipment. The bigger stores even scan the data encoding on the back. It is not so different to provide it to an auction house.
I guess that the tightening of AML laws led to this. The finance and insurance industry have strict AML and KYC regulations. At the end of the day, fine wine, art, watches, cars, etc. can be exploited for money laundering purposes.
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