Prior to verifying a customer's identity under CIP, what action should a financial institution take?

• A. Provide adequate customer notice
• B. Obtain customer consent to perform background check
• C. Request government-issued ID only after verification
• D. Begin transaction immediately

Answer: (A)

Providing adequate notice is required because CIP onboarding involves confirming a customer’s identity before fully opening or servicing an account. Informing the customer that identity verification will occur and what information may be collected ensures transparency and sets expectations for the verification process. After this notice, the institution collects identifying information and proceeds with verification using documentary or non-documentary methods, which may include government-issued ID as part of the verification. The other options don’t fit CIP: background checks aren’t a CIP prerequisite, requesting ID only after verification contradicts the verification flow, and starting a transaction before identity verification would bypass CIP controls.