With regulations tightening in 2025, Canadian dealerships need to take KYC, Know Your Customer, more seriously than ever. Governed by FINTRAC (Financial Transactions and Reports Analysis Centre of Canada), KYC regulations apply to any dealership handling large cash deals or offering financing options.

If you're not prioritizing compliance, you're risking audits, penalties, and reputational damage. This blog breaks down exactly what FINTRAC requires from auto dealers in 2025 and how tools like AVA ID can make compliance simple, secure, and scalable.

What Is KYC and Why Does It Matter?

KYC is a mandatory process for verifying your customers' identities and assessing potential risks such as fraud or money laundering. Dealerships that handle cash transactions of $10,000 CAD or more or offer in-house financing must comply with FINTRAC's KYC regulations.

Why it matters:

• Complies with federal law
• Prevents money laundering
• Protects your dealership from fraudulent activity
• Strengthens customer trust and credibility

What FINTRAC Requires from Dealers in 2025

Let’s break down the five core components of FINTRAC’s KYC expectations and how AVA ID can help at each stage.

1. Customer Identification

As of 2025, you must verify the identity of anyone involved in a qualifying transaction before or at the time of the transaction.

Accepted ID verification methods:

• Government-issued photo ID (in-person or digital)
• Dual-process method (e.g. address and date of birth verification)
• Credit file matching (via a Canadian credit bureau)

💡 Simplify this step with AVA ID, a digital identity verification tool that enables real-time ID scanning, biometric matching, and fraud detection, all integrated with your sales process.

2. Record-Keeping

Dealers are required to securely store the following for at least five years:

• Copies of ID and verification methods
• Transaction details (amount, date, purpose)
• Risk assessment notes and supporting documentation

Using AVA ID automates this process with encrypted digital storage and secure access logs—eliminating the risk of misplaced or non-compliant records.

3. Ongoing Monitoring

If you work with repeat customers, offer internal financing, or accept deposits over $10,000 CAD, you must:

• Monitor for unusual or suspicious activity
• Update client records regularly
• File Suspicious Transaction Reports (STRs) when applicable

Tools like AVA ID can help flag anomalies in ID verification and alert your team of potential fraud indicators before the deal progresses.

4. Compliance Program

You must maintain a written, regularly reviewed compliance program that includes:

• A designated compliance officer
• Documented policies and procedures
• A risk-based approach to onboarding
• Team training and education
• Biennial audits or reviews

AVA ID helps ensure these protocols are followed by standardizing and documenting every identity verification step in your process.

5. Mandatory Reporting

You must report the following to FINTRAC when applicable:

• Large Cash Transaction Reports (LCTR) for transactions over $10,000 CAD
• Suspicious Transaction Reports (STR)
• Terrorist Property Reports (TPR)

When combined with AVA Credit or your CRM, AVA ID creates an auditable trail of identity verification that simplifies your reporting requirements and ensures transparency.

What Happens if You Don’t Comply?

FINTRAC audits have become more aggressive. Dealers who fail to comply face:

• Hefty administrative monetary penalties
• Potential license suspensions
• Loss of customer trust
• Reputational risk with lenders and OEMs

Avoid the fallout by taking proactive steps to secure your KYC processes.

Why AVA ID Is the Ideal KYC Solution for Dealerships

Most dealers aren't identity verification experts—and you shouldn't have to be. AVA ID is a purpose-built, auto-specific identity verification platform that simplifies compliance and builds trust with your customers.

✅ Instantly verify ID remotely or in-store
✅ No hardware required, just a browser or mobile device
✅ AI-driven fraud checks and document scans
✅ Digital paper trail for FINTRAC compliance
✅ Real-time alerts for suspicious or duplicate activity

Whether you're onboarding a new buyer, managing a cash deal, or validating credit applicants, AVA ID ensures you're always compliant and always protected.

Final Thoughts

In 2025, FINTRAC is placing a sharper focus on compliance—and dealerships must be ready. By putting strong KYC processes in place now, you're not just avoiding fines, you're creating a safer, more transparent customer experience.

Ready to modernize your KYC process?
Check out AVA ID and book a free demo today to see how effortless compliance can be.