In which of the following circumstances is it LEAST appropriate for a bank to file a SAR regarding Internet activity?
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A. B. C. D.D
The filing of a Suspicious Activity Report (SAR) by a bank is a regulatory requirement under the Bank Secrecy Act (BSA) and is designed to detect and prevent financial crimes such as money laundering, terrorist financing, and other illicit activities. The SAR is used to report any suspicious activity that may indicate that funds are being used for illegal purposes or may involve money laundering.
Out of the given options, the least appropriate circumstance for a bank to file a SAR regarding Internet activity would be option D, where a customer is making electronic transfers between their own checking and savings accounts that are just below the $10,000 reporting level.
Explanation: Option A, where the bank determines that one of its customers is the victim of identity theft, may indicate that the customer's account has been compromised and may be used for fraudulent activities. Thus, filing a SAR would be appropriate in this scenario.
Option B, where the bank becomes aware of identity theft of its domain name, may indicate that a fraudster is trying to impersonate the bank and obtain confidential financial information. Filing a SAR would be appropriate in this scenario as well.
Option C, where the bank discovers that someone has hacked into its data system in order to obtain confidential customer data, may indicate that the bank's systems have been compromised, and sensitive customer information is at risk. Filing a SAR would be appropriate in this scenario as well.
However, option D indicates that a customer is making electronic transfers between their own checking and savings accounts that are just below the $10,000 reporting level. This activity is not inherently suspicious or indicative of any illegal activity. It is not uncommon for customers to move funds between their own accounts for various reasons.
Additionally, the bank's transaction monitoring program would have already identified any transactions over $10,000 and flagged them for reporting. Therefore, it would not be appropriate to file a SAR in this scenario as there is no indication of suspicious activity.
In summary, the least appropriate scenario for a bank to file a SAR regarding internet activity is when a customer is making electronic transfers between their own checking and savings accounts that are just below the $10,000 reporting level, as this activity is not inherently suspicious or indicative of any illegal activity.