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#2255837 - 06/23/21 07:27 PM ACH Fraud - Suspect or Victim?
MJNoone Offline
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MJNoone
Joined: Dec 2010
Posts: 94
Kansas
We just finished a regulatory BSA Exam where the examiner questioned suspect names taken from unemployment fraud ACH transactions. The discussion was whether the name on the fraudulent ACH (which does not match our customer account name) is truly a suspect or a potential victim of ID theft. They indicated we should have done more investigating to determine if the person was a victim before listing as a suspect; or we should have listed the suspect as Unknown and identify the ACH name in the narrative. Without being a 314(b) financial institution, how in the world would you investigate whether the ACH individual is a victim of ID theft? Have I missed something somewhere?
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#2255849 - 06/23/21 08:17 PM Re: ACH Fraud - Suspect or Victim? MJNoone
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If I understand, these are cases in which your customers received unemployment insurance funds that were payable to someone else, and you named the person the funds were payable to a subject.

I don't know that I agree with the statement that you should have investigated further to determine if the payee was a victim of ID theft, but I also understand that in most of these incidents that's the case. I do think I agree with the examiner questioning why those people would be named as subjects, and what role you believe they played in the fraud. The criticism likely boils down to naming someone as a subject in a SAR and not explaining why they're a subject in the narrative. If you did clearly state why you're suspicious of the payees, then I don't know.

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#2255853 - 06/23/21 08:42 PM Re: ACH Fraud - Suspect or Victim? MJNoone
MJNoone Offline
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MJNoone
Joined: Dec 2010
Posts: 94
Kansas
Your understanding is correct. Narratives explain the suspicion of the payees as not being the owner of the account the funds were going into.

I guess I'm really wondering if I have been doing these fraud SARs wrong from the beginning and should have be using an Unknown suspect?
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#2255883 - 06/24/21 12:46 PM Re: ACH Fraud - Suspect or Victim? MJNoone
April Offline
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Joined: May 2014
Posts: 12
Florida
I also agree that your understanding is correct since we do the same exact thing. However, even as a participating 314(b) bank I have never been able to get an institution (other than one nearby local credit union) to provide me with any information. Anytime I send a request I'm always told by their 314(b) department that my request doesn't fall under the scope of 314b and they will not share any information with me or they just do not acknowledge my request at all.
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#2255898 - 06/24/21 03:13 PM Re: ACH Fraud - Suspect or Victim? MJNoone
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Joined: Apr 2021
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I'm confused. What does 314b have to do with this? UI credits come from the State, so what would you be 314b'ing?

It's not possible for you to "investigate" the name on the ACH, that's not your customer. I have never listed the ACH person's name as a suspect/subject. Whether they're a victim or suspect or perpetrator isn't possible for you to know. I copy/paste our bank record description into the narrative that way it can be searched for and found in the FinCEN database if they're looking for that name. If anything, I'd only list our customer as the SAR suspect based on subsequent activity.

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