An immigrant residing in the United States opens a bank account that includes a debit card. Several months later, the transactional monitoring system identifies small deposits into the account followed by corresponding ATM withdrawals from a country bordering a conflict zone.
How should the bank respond?
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A. B. C. D.C
In this scenario, an immigrant residing in the United States has opened a bank account that includes a debit card. The bank's transactional monitoring system has identified a pattern of small deposits into the account, followed by corresponding ATM withdrawals from a country bordering a conflict zone. The bank now needs to determine the appropriate response to this suspicious activity.
Let's analyze each answer choice and determine the most suitable course of action:
A. Block any further activity: Blocking any further activity would be a drastic step to take without conducting further investigation or gathering additional information. It may unnecessarily inconvenience the customer and may not address the underlying concerns related to potential money laundering or terrorist financing.
B. File a suspicious transaction report: Filing a suspicious transaction report (STR) would be a prudent action to take in this situation. The identified pattern of small deposits followed by withdrawals from a conflict zone raises red flags and indicates a potential risk for money laundering or terrorist financing. By filing an STR, the bank alerts the appropriate regulatory authorities of the suspicious activity, allowing them to further investigate and take appropriate action if necessary.
C. Initiate an investigation into the activity: Initiating an investigation into the activity is another appropriate response in this scenario. The bank should assign a team or designated personnel to conduct a thorough investigation to gather additional information and assess the nature of the transactions. This investigation could involve reviewing customer records, conducting research on the conflict zone and its associated risks, and possibly contacting the customer for additional information. The investigation aims to determine the legitimacy of the transactions and whether they pose any money laundering or terrorist financing risks.
D. Contact the customer if the transaction activity continues: Contacting the customer if the transaction activity continues is a valid step to take as part of the overall response. If the bank observes ongoing suspicious activity, it is important to reach out to the customer to verify the legitimacy of the transactions and gather any necessary additional information. This contact can help the bank gain insights into the customer's intentions and provide an opportunity for the customer to explain the transactions in question.
In conclusion, the most appropriate response in this scenario would be to both file a suspicious transaction report (B) and initiate an investigation into the activity (C). Filing an STR allows the bank to fulfill its regulatory obligations and involve the appropriate authorities. Initiating an investigation enables the bank to gather more information and assess the legitimacy of the transactions. Additionally, if the suspicious activity continues, contacting the customer (D) can provide further clarification and assist in the investigation process.