We made an exception and cashed an on-us check for a non-customer. After making a fuss about providing his SS#, he finally did. As he was leaving he said the social security number he provided was not real. The check was for $4000. I would appreciate opinions on filing a SAR.

You identified a subject, but the amount is below the $5,000 mandatory threshold. You can choose to file, but it will be voluntary.

I wouldn't give you my SSN either in that situation. It's not CTR reportable, and as long as you got proper ID, then what is the issue?

If all you are doing is orally asking non-customers for their SSN - likely 9 out of 10 are probably not correct.

Another anon pipes up with:

I realize your issue was an exception, but there are banks that do that routinely: demanding SSNs from customers for transactions below $10,000. It is a result of an over-zealous misinterpretation of the BSA, and pressure from examiners. They are trying to avoid having multiple transactions aggregate to over $10K, then having to file a CTR with some of the conductor info being listed as unknown. But that's the whole reason for the "Unknown" option on CTRs - situations like that.

So the real issue here is that some banks are demanding sensitive, non-public information from individuals with whom they have no banking relationship, for a transaction that is not reportable on a CTR or a SAR, and which generates no BSA recordkeeping duties. Basically the bank should not be asking in general in such situations, and at this point should be looking at ways to purge/destroy all record of such SSNs when they did not lead to an aggregate CTR or a SAR filing or record required by the BSA.

We collect all of the identifying information, tax ID and date of birth, to assist in the requirement to run every transaction through OFAC. Most of the transactions are below the CTR or SAR thresholds, but OFAC doesn't have a threshold. We find it much easier to collect the information at the beginning of the transaction rather than run the name, get a match and then have to start asking for more information.

We have made several exceptions over the years for conducting business with a non-customer. That said, we create a profile for them in our system, and basically follow new account opening procedures.....without actually opening any accounts. If this non-customer would have "made a fuss" here, we would have kindly directed them to the nearest check cashing place.

I wonder though, was the check drawn from your bank? Do you not normally cash checks from your bank for non-customers? And if the check is not from your bank, what is your recourse to collect the $4000.00 if the check is "bad"?

We made an exception and cashed an on-us check for a non-customer. First mistake.

You need to follow what your bank policy states.

I would also notify the account holder and notify them that this process would stop since it has become an issue.

We cash on-us checks for non-members due to concerns regarding potential wrongful dishonor suits. It is especially irksome when it is a non-member that owes us for a charged off account. I am not aware of any changes to the UCC - has there been a change allowing us to choose whether or not we cash on-us items?

"Although there are a few isolated decisions to the contrary, the generally accepted view is that the payee of a check has no cause of action against a bank for refusing to cash a check."

https://www.bankersonline.com/articles/103573

Also if your account agreement states that you will cash for non-customers that may be a different issue.

Although the UCC requires that you honor checks that are properly payable, UCC requirements can be modified via deposit contract. For that reason, many institutions have inserted clauses in their deposit contracts stating that they will not negotiate checks for non-customers.

Thank you gentleman!