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#1406283 - 06/21/10 08:03 PM Large NSF check = SAR?
PeeWee Offline
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Joined: Aug 2007
Posts: 254
I know banks pay or reject NSF items everyday. For some reason, some activity we are reviewing today hit me the wrong way.

I'll make up some numbers for the scenario...business customer writes a $12,000 check to a company when there is only $50.00 in the account. We reject and return so no loss to our bank.

Though it doesn't match up to the definition of Check Fraud (http://www.bankersonline.com/aml/suspiciousactivitytypes.html) it just doesn't feel right...however I know we can only guess at reasons a customer would do something like this.

Would you agree, not SARable?
Last edited by PeeWee; 06/21/10 08:19 PM. Reason: grammatical error
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#1406306 - 06/21/10 08:14 PM Re: Large NSF check = SAR? PeeWee
Aggs Offline
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Aggs
Joined: Nov 2009
Posts: 1,331
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I would look at the whole account and the history. Maybe the person wrote the check because they were expecting a large wire to be deposited into the account that day and it never came? I would check their average balances, transaction history, etc. I would see who the check was payable to, have they written checks to them before in large amounts, etc.

If the transaction doesn't fit, make sense, there have been no large deposits after that check bounced (that would justify them writing it, albeit a little too early), I would consider the SAR for check fraud. I am not sure if I would file one at that point, but it would probably go to my SAR committee for discussion/consideration...
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#1406396 - 06/21/10 09:16 PM Re: Large NSF check = SAR? Aggs
Kathleen O. Blanchard Offline

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Kathleen O. Blanchard
Joined: Dec 2000
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I would do a little digging. Is this account assigned to someone in the bank, a lender/relationship officer or branch manager? If yes, see what they know. Perhaps a wire was expected and never showed - not good planning but does happen.

Or, it may be that this company is starting to have problems and wrote a bad check to buy a few more days to work on their problems.

If no one is familiar with the customer, then I would bring to my committee if I had one. That decision might be to wait to see if it happens again. If once, perhaps a mistake. If it happens again, you might be seeing intentional reportable fraud - occurring because of trying to keep the wolf from the door.

If there is no committee, those are still the choices, file or document as possible error and watch. Second time file.
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#1406400 - 06/21/10 09:24 PM Re: Large NSF check = SAR? Kathleen O. Blanchard
BrendaC Offline
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Joined: Sep 2001
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Sweet Home AL
I agree - you need to investigate. Maybe someone in the office picked up the wrong checkbook, maybe they were anticipating a loan proceeds deposit. You don't know until you research.
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