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#2241191 - 08/18/20 06:15 PM Wire Transfer Purpose
Complycated Offline
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I am curious to see what others are doing regarding consumer wire transfer purposes. If you ask for a purpose for all wires, do you also ask for proof of that purpose, like a purchase agreement for an item being purchased?

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#2241203 - 08/18/20 07:12 PM Re: Wire Transfer Purpose Complycated
BrianC Offline
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Illinois
As with anything BSA, the approach should be risk-based. For example, if I'm wiring $247,587.53 to an area title company, you probably won't ask me for a copy of my closing document to prove that I'm buying a house. However, if I'm an import/export business sending funds to a high-risk international jurisdiction and I claim that I'm buying widgets to resell in the U.S., then you may be more interested in my wire purpose and perform some additional due diligence to verify that I'm not engaged in trade/based money laundering.

Some institutions may ask the wire purpose for an initial wire and if the wire is recurring, not ask on subsequent wires. Your due diligence procedures should be based on the inherent risk profile of your customer base.
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#2241204 - 08/18/20 07:14 PM Re: Wire Transfer Purpose Complycated
Curious in Kansas Offline
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Joined: Oct 2015
Posts: 46
Yes, we ask for wire transfer purposes and proof of that purpose for an item being purchased if its someone who doesn't send wire transfers very often. We have a few individual customers who normally send wires and are comfortable with what they're doing after investigation. Those who don't send wires often and/or the dollar amount is large, we ask.

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#2241207 - 08/18/20 07:31 PM Re: Wire Transfer Purpose Complycated
Complycated Offline
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Posts: 149
I have a customer whose wire volume is increasing and who always tries to give a sarcastic answer when asked about the purpose. (For example, wiring $4,000 to an individual beneficiary and saying it's to buy bananas or $6,000 to a company to buy marshmallows.) I spoke with our Compliance Officer and said I'd like to require him to send us a purchase agreement so we can be sure his transactions are on the level & that if he can't provide one we would no longer be sending wires for him. I am getting some pushback on this, so I guess my real questions is, as the BSA Officer, isn't this something I should be able to require of this customer but not the next if I feel this one is trying to hide something & is very hesitant to answer my questions? Wouldn't this be considered EDD on a higher risk customer, which is required by the Bank Secrecy Act?

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#2241210 - 08/18/20 07:46 PM Re: Wire Transfer Purpose Complycated
BrianC Offline
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Illinois
Quote
isn't this something I should be able to require of this customer but not the next if I feel this one is trying to hide something & is very hesitant to answer my questions? Wouldn't this be considered EDD on a higher risk customer, which is required by the Bank Secrecy Act?


Short answer: Yes.

We don't have to require this for all customers, but if some activity catches our eye, then additional due diligence is warranted. I'm sure many posters on BOL could share stories of elder abuse scams they've stopped because staff asked questions when a customer suddenly started sending unusual wires. Also your customer could be a money mule...Who knows?

Besides asking for the purpose of the wires, have you performed any internet searches for the beneficiaries to help learn more? Have you reviewed the source of the funds for the wires?

Bottom line, if you don't like the answers I'd be making this an ex-customer.
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#2241212 - 08/18/20 07:55 PM Re: Wire Transfer Purpose Complycated
Complycated Offline
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Joined: Aug 2013
Posts: 149
I agree with you completely on making it an ex-customer, but unfortunately, that will never be my choice to make. Thank you for reassuring me that I'm on the right track. Sometimes it's really easy to second-guess yourself in this line of work!

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#2241213 - 08/18/20 07:56 PM Re: Wire Transfer Purpose Complycated
John Burnett Offline
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John Burnett
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Cape Cod
I am firmly in your corner, Complycated. Smart-a$$ answers to legitimate inquiries are not something that the bank should be laughing about -- it's serious business. It would be completely legitimate to request documentation of the underlying transaction -- a purchase order or shipping invoice, etc. In the meantime, you could be gathering information on his wire activity and checking on the wire beneficiaries -- type of business, location, etc., -- to see if it makes sense for your customer's business to be purchasing goods or services from those businesses.

Whether you as BSA Officer should be dealing directly with the customer is a policy matter for the bank. But someone should be pressing the customer for legit answers rather than sarcastic quips. The bank can and should tell the customer that the bank needs to know what's going on as part of its responsibilities to know and understand its customers. If there's no cooperation, that should be enough of a "2 by 4 upside the head" hint that it's time to (1) consider a SAR and (2) weigh whether the bank needs to allow itself to be saddled with such a customer.
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#2241217 - 08/18/20 08:46 PM Re: Wire Transfer Purpose Complycated
HappyGilmore Offline
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Joined: Jun 2004
Posts: 19,334
Pulling people out of the ditc...
if you are the BSA Officer and don't have a say in making someone an ex-customer, you need to fix that, pronto.
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