Know Your Artists (KYA)
Learning from mature industries like banking and finance, one of the most effective ways to prevent fraud from infiltrating your platform is by implementing strong KYC (Know Your Customer) processes. At the Music Fights Fraud Alliance we like to call this Know Your Artists (KYA). This is crucial if you are running an artist distribution platform, or if you manage a label distribution platform working with record labels. KYA checks allow you to verify the identity and legitimacy of new users or clients before they gain access to your platform.
Why KYA Matters:
Prevents fraud at the source: By vetting new artists or labels before they distribute music through your platform, you reduce the likelihood of fraudulent actors entering your system and causing issues with fake streams or copyright infringement.
Mitigates business risk: Protect your business from financial and reputational damage by ensuring that only genuine, trustworthy clients have access to your distribution services.
DSP compliance: Many DSPs expect distribution partners to maintain high standards of client vetting, ensuring that fraudulent content or actions are not encouraged or enabled on their platforms.
Steps to Conduct KYA Checks
Collect Basic Identification Information: At a minimum, gather personal information such as full legal name, address, date of birth (for individuals), and company details for businesses (e.g., registered company name, business registration number, and contact information).
Request Official Documentation: Verify the identity of the individual or business by requesting supporting documents such as:
For individual artists: Government-issued ID (passport, driver’s license, national ID)
For businesses/labels: Business registration documents, tax identification numbers, or company ownership documentation
Cross-check Information with Public Records: Use online public records or databases to verify the provided information. Ensure that the business is registered and active and that the individual’s identity matches official databases.
Perform Sanctions and PEP Checks: Use third-party services or tools to check whether the individual or business is flagged under any global sanctions lists or is a politically exposed person (PEP), which can signal higher risk.
Verify Payment Details: Ensure that the payment methods (bank accounts, PayPal accounts, etc.) are tied to the same individual or business entity that you’ve vetted. This step helps prevent fraudulent payment activities tied to identity theft or misrepresentation.
Use an IP Check: Monitor the IP addresses of new sign-ups to ensure they align with the location of the individual or business. Mismatched IP addresses or the use of VPNs can be red flags for potential fraud.
Social Media and Online Presence Verification: Check whether the artist or label has an established online presence. Active social media accounts, official websites, or profiles on professional platforms (like LinkedIn) provide further legitimacy and reduce the risk of onboarding a fraudulent actor.
Request Sample Work: If applicable, ask the artist or label to provide a sample of their work or catalog. This allows you to ensure that they are genuine creators with a legitimate product and can give insight into their prior distribution practices.
Have a Policy in Place for High-Risk Clients
For artists or labels that raise red flags during the KYA process (e.g., discrepancies in their documentation or suspicious online behavior), have clear policies in place:
Conduct Enhanced Due Diligence (EDD): For higher-risk individuals or businesses, conduct a more in-depth investigation, which may include obtaining additional documentation or performing a more detailed financial or operational review.
Reject Suspicious Sign-Ups: If the vetting process raises significant concerns, don’t hesitate to reject the sign-up. Protecting your platform’s integrity is more important than onboarding a potentially fraudulent client.
