Some transactions should immediately prompt the attention of a bank or financial institution. The following is some information about money laundering and some indications that a person or institution might be trying to do it.
Why You Should Monitor Transactions
Money laundering is a huge scam that many businesses and individuals are trying to perform successfully. It’s an illegal activity that these people do to conceal where they got the money from. Money laundering is widespread in businesses that are involved in illegal activities.
Money launderers engage in a vast assortment of activities and processes. A financial institution must stay abreast of current money laundering trends to be active in stopping it when it happens. The institution itself could get into trouble if the authorities find out about the money laundering and that the establishment didn’t do anything to stop it.
Examples of Suspicious Activities or Transactions
These are some common suspicious activities or transactions that a client may do if the purpose is to launder money:
- Mismatch of Profession and Transactions
One example of suspicious activity is if a customer seems to have a mismatch of profession and transactions. For example, it will seem a bit shady if an extremely small business suddenly starts doing hundreds of thousands of dollars of transactions every day. That’s a clear indication that something may be going on. A financial entity might want to investigate this matter.
2. Multiple Payments of Small Amounts
A business that frequently does money transfer processes for multiple payments in small amounts may be involved in something that’s not up to standard. Such activity should also be investigated to protect the integrity of the institution.
3. Increase in Cash Deposits
An increase in cash deposits is also a huge red flag. There’s nothing wrong with a business making deposits. However, it might be suspicious if it’s cash, and it comes a lot more frequently than ever before.
4. Customer Asking to Open Number Accounts Abroad
A customer who asks to open a number of accounts abroad might be up to something. Money laundering could be at play there. The financial institution may want to observe that particular customer a little more to see why the customer is making such an odd request. Another red flag occurs if the client or customer cannot give a reasonable explanation for such a request. If the customer can’t give a good reason for opening many accounts abroad, the chances are high that some suspicious activity is happening.
5. Request to Change Large Bills for Smaller Ones
A customer constantly requesting to exchange large bills for small bills may also be a sign that money laundering practices might be going on. The institution should take note and pay careful attention if a customer makes this type of request more than once or twice. The institution should also check the large bills and verify that they are legitimate and authentic. Secondly, the institution may want to send the information to an authoritative branch to continue the investigation on a deeper level.
Now you know of some of the most common suspicious transactions. Pay close attention and report or investigate any transactions that come across like the ones mentioned above. Make sure all of the money transfer services you use are legitimate.
