Negative News
Negative news is the everyday name for adverse media searching. Why raw search results are leads to review, not findings.
Definition
Negative news is unfavourable coverage about a person or organisation, found by searching public sources during due diligence. In compliance usage the term is largely interchangeable with adverse media, and many firms use both in the same policy.
Where a distinction is drawn, it is one of scope. "Negative news" tends to describe the search activity and its raw output: articles, posts and reports that say something bad about the subject. "Adverse media" tends to describe the control as a whole, including the risk categories that matter, the relevance assessment and the recorded decision. Put simply, negative news is what the search returns; an adverse media finding is what survives review.
The distinction is worth keeping because not everything negative is relevant. A restaurant with poor reviews, a footballer criticised for a bad season or a company in a contract dispute all generate negative news. None of that is necessarily a financial crime risk.
Why a regulated firm cares
The practical reason is that negative news is where the volume sits. A search on a name, especially a common one, can return a large number of results. If a firm treats every hit as a finding, analysts drown and genuine risks are missed in the noise. If a firm filters too aggressively, it can miss the one article that matters.
Getting the search right is therefore a question of quality as much as compliance. The firm needs searches that are wide enough to find credible reports in the languages and regions its customers come from, and narrow enough that analysts can review what comes back with care.
How it is searched in practice
A few techniques make negative news searching more useful.
Pair the name with risk terms. Searching for a name alone returns everything. Adding terms such as fraud, bribery, laundering, sanctions, arrested, charged, convicted or investigated focuses the results on the categories that matter. Many firms maintain a keyword list per category and per language.
Search the variants. Transliterations, maiden names, former company names, trading names and common misspellings all need coverage. A report in a local language will rarely use the English spelling on an onboarding form.
Anchor to identifiers. Adding a city, company name or occupation to the search narrows results to the right person, but it also risks excluding relevant reports that omit those details. Running both a broad and an anchored search is a common compromise.
Look at dates and follow-ups. An arrest report may have been followed by an acquittal. The original story is often easier to find than the later one, so analysts should look for the outcome before drawing a conclusion.
Be careful with aggregators. The same wire story republished across many sites is one source, not many. Counting repetitions as corroboration overstates the evidence.
Why raw results are not findings
A search result tells you that a document contains the words you searched for. It does not tell you that the document is about your customer, that the allegation is true, or that it matters for the relationship. Each of those is a separate judgement.
Treating raw results as findings causes two kinds of harm. It produces unjustified decisions against customers who share a name with someone else, and it creates records that describe a customer as linked to crime when no one has checked. A good file shows the step from result to finding explicitly: what was searched, what came back, what was excluded and why, and what was kept.
Regulatory basis
Regulatory texts rarely use the phrase "negative news", but the activity sits within the due diligence obligations.
- FATF Recommendation 10 requires customer due diligence and ongoing due diligence on the business relationship, applied on a risk-based approach.
- FATF Recommendation 12 requires enhanced measures for politically exposed persons, including establishing source of wealth and source of funds, where public information is a common input.
- Directive (EU) 2015/849 and the UK Money Laundering Regulations 2017 require risk-based due diligence and enhanced measures in higher-risk situations.
Firms should also consider data protection rules when storing articles about individuals, and confirm the requirements that apply in their own jurisdiction.
Worked example (hypothetical)
An analyst at a lending firm searches the fictional name "Arlo Brennick" with a keyword list. Forty results come back. Thirty are the same wire story about a dispute between two companies, neither connected to the customer. Six mention a different Arlo Brennick, a local councillor. Three are a blog post alleging, without evidence, that the customer's company "launders money", republished on two forums.
One is a trade publication reporting that the customer's company was fined by a regulator for record-keeping failures. The analyst keeps that one as a finding, notes the blog post as unsubstantiated and excluded, and records the reasoning for the rest.
Related terms
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Adverse Media
Adverse media is published information linking a person or company to crime or serious misconduct, screened as part of customer due diligence.
Alert Rules
Configured parameters within AML software that automatically trigger an alert when suspicious activities match defined criteria.
Algorithmic Fraud
Automated and programmatic approaches to attempting financial fraud at scale utilizing bots and specialized software.