Effective Response to Frequent Remittances with Identical Amounts
Question
In reviewing recent transaction activity, a compliance officer for a money transmitter notices that several customers are each remitting the same amount of money but much more frequently.
How should the institution respond?
Answers
Explanations
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A. B. C. D.A
The compliance officer for a money transmitter has noticed that several customers are each remitting the same amount of money much more frequently. This activity may be indicative of money laundering or terrorist financing. Therefore, the institution must take appropriate action to mitigate the risks associated with this activity.
Option A: File a suspicious transaction report This option is a suitable course of action for the institution to take. If there is suspicion of money laundering or terrorist financing, the institution is required to file a suspicious activity report (SAR) with the relevant authorities, as per regulatory requirements. A SAR will help law enforcement agencies to investigate the transactions further.
Option B: Instruct the tellers not to process remittances for these customers in the future While this option may prevent further transactions, it may not address the underlying concern of the suspicious activity. It may also lead to customers taking their business elsewhere, which could affect the institution's revenue and reputation.
Option C: Conduct further investigation to determine whether this is truly suspicious activity This option is a reasonable course of action. Conducting further investigations will help the institution to determine whether the activity is suspicious. The investigation may involve reviewing the transaction details, customer information, and other relevant information.
Option D: Immediately contact the customers and ask them why they are remitting money more often This option is not recommended as it may alert the customers and provide them with an opportunity to change their behavior. If the activity is suspicious, the institution should not contact the customers directly as it may compromise the investigation.
In summary, option A and option C are the most suitable courses of action for the institution to take. The institution should file a suspicious activity report (SAR) with the relevant authorities and conduct further investigations to determine whether the activity is truly suspicious.
