During a recent internal audit, they made an observation that we are not formally reviewing the sales of these for suspicious activity.

- Read this Handbook and ensure that appropriate staff has read and has access to this Handbook.
- Maintain a management-approved AML Compliance Program, including designation of a BSA/AML Compliance Officer.
- Conduct BSA/AML training as part of new employee training, and annually thereafter, for each employee who sells prepaid cards. MPS recommends training every employee in the company, if feasible. Keep acknowledgement of this training on file.
- Conduct an annual independent review of your AML Program.
- Comply with the requirements of Section 326 of the USA PATRIOT Act, including your institution’s Customer Identification Program (CIP) and MPS’
CIP requirements for Reloadable, Travel, and Youth cards, as prompted by the Simplexus portal.
- Report any unusual or suspicious activity (related to the Simplexus products) to MPS through the AML hotline and a Suspicious Activity Investigation Report (IR).
- File Suspicious Activity Reports (SARs) as necessary to meet your institution’s BSA requirements. You should not inform MPS that a SAR has been filed, but simply that you have discovered potentially suspicious activity.
- Provide MPS with a copy of any Currency Transaction Report (CTR) filed in relation to a Simplexus product (for aggregate transactions over $10,000 in cash), or submit a Currency Transaction Reporting form.
- Submit Record of Cash Sales form to MPS for any Simplexus Gift Card purchases made with $3,000 or more in cash.- Fulfill recordkeeping requirements

As previously mentioned, we don't sell to non-customers or for cash. All sales must be made by a bank customer with an on-us check or withdrawal from a savings account.

I guess my question would be how do you handle gift card sales that are made by customers materially done with cash. For example, a customer deposits cash for $1,000.00 to an existing account that has say $10.00 in it already and then the purchases a gift card for the $1,000.00 technically by your system it was not done as cash (presented an on us item or transfer done) but it was materially cash. That would be something to consider I think.

It does appear that the bank has agreed to do some monitoring for suspicious activity.

You will not have CIP issues since you only sell to existing customers. You do not sell for cash (unless there are some cash-like purchases as mentioned via deposit to account).

What else could be suspicious that your bank employees might observe? # of cards requested at one time? Frequency of card purchases? You do not see card activity, do you?