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#2227644 - 12/18/19 03:27 PM Handling Apps that pay Person to Person
Couples Offline
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The Igloo
We have had numerous customers sending large amounts of funds via Venmo, Zelle, CashApp, etc. I am at a loss as to how to handle transactions that I feel may be excessive. i.e. Since September 1, 2019, we have had one customer sent over $21,000 via Venmo. Another customer sent over $33,000 via CasApp. Naturally we don't know who the funds are going to or what the money is for. I am not concerned about the occasional P2P transaction but the noted amounts seem suspicious. The customers are rated high risk and along with other suspicious activity, a SAR has been filed on one of them.

How are other banks dealing with these types of transactions? Are there any scams out there involving these P2P apps? I guess any guidance is helpful. Thanks!

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#2227645 - 12/18/19 03:29 PM Re: Handling Apps that pay Person to Person Couples
rlcarey Offline
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The customers are rated high risk and along with other suspicious activity, a SAR has been filed on one of them.

Why are they still customers?
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#2227650 - 12/18/19 03:40 PM Re: Handling Apps that pay Person to Person Couples
Couples Offline
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The Igloo
Good question, Randy and I will look into that.

But, I am looking for any advice or info as to what other FIs are doing now.

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#2227651 - 12/18/19 03:41 PM Re: Handling Apps that pay Person to Person Couples
rlcarey Offline
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Galveston, TX
I would call them, ask them what they are doing and go from there.
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#2227652 - 12/18/19 03:43 PM Re: Handling Apps that pay Person to Person Couples
Couples Offline
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The Igloo
That is good advice. Thanks!

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#2227653 - 12/18/19 03:55 PM Re: Handling Apps that pay Person to Person Couples
ACBbank Offline
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New York City
Would you look at it any differently if it was a domestic ACH and all other factors were the same? I'm not sure that any of these new apps are more or less risky than ACH activity. Unless these are wealthy individuals or private banking clients that's a lot of money to be moving around for a consumer.
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#2227658 - 12/18/19 04:17 PM Re: Handling Apps that pay Person to Person Couples
Couples Offline
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I guess I look at these as being riskier only because some ACHs we know where the funds are going. These P2P transfers give us no indication who, what or where!

But it is a lot of money for a consumer customer. One of the customers has the funds but the other one appears to be getting the funds from "outside" sources (parents, cashing in investments).

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#2227700 - 12/18/19 07:31 PM Re: Handling Apps that pay Person to Person Couples
John Burnett Offline
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Cape Cod
When these P2P app transactions appear reasonable in the context of the customer and their account, I don't see a problem. But when the customer is already tagged as higher-risk from a BSA/AML perspective and you see unexplained, high-value P2P transfers in and/or out, I think you would smell a SAR in the making.

A low balance account that gets unexplained larger value deposits and transfers out those amounts via P2P, effectively churning funds through the account rapidly, would also deserve some attention.

As mentioned earlier, a conversation with the account holder may clarify matters for you and give the transfers some legitimacy. But if you can't develop a reasonable explanation for the activity .....
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#2227708 - 12/18/19 07:57 PM Re: Handling Apps that pay Person to Person Couples
ColoradoAML Offline
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Venmo and other p2p transmittal services are similar to cash transactions in that their purpose and sender/recipient are not traceable (by the bank), and they are similar to wire transfers because of the ease and speed of transmitting funds over long distances (again, while not allowing that to be known to the bank). It's obvious why whose features might be attractive to money launderers.

It may be helpful to consider whether similar cash transactions would raise red flags, and as suggested, ask the customer and evaluate their answer.

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#2227719 - 12/18/19 08:42 PM Re: Handling Apps that pay Person to Person Couples
MyBrainHurts Offline
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Illinois
"Are there any scams out there involving these P2P apps? "

The most common fraud with P2P apps is linking a stolen bank account and transferring money through an app to conceal its source. You can learn how these scammers work at a website called the Pirate Ship. https://prtship.com/ The amount of people looking to scam bank and P2P providers is frightening.

Also, many of the P2P providers are listed as 314(b) participants. Reach out.
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