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#2260826 - 10/06/21 07:10 PM Closing Suspicious Account - What to Tell Customer
Sugar Coater Offline
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Sugar Coater
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LA
We have a customer relationship that we are terminating due to suspected illegal activity (classic money laundering). Our COO spoke to the customer yesterday explaining that we would be closing his accounts, answered his questions, and said that the customer basically talked in circles. This customer has since reached out to our bank President as well as board members who all stood by our decision to close (even without knowing the full story). The customer says he doesn't understand why we are closing his accounts and actually went to one of our board member's business claiming that he thinks it's for personal reasons and demanding that our board member find out why the account is being closed and call him back with answers. Based on the customer's activity, we believe he knows fully well what he is doing. My question is, what can we tell the customer? Can we be upfront and tell him that based on his pattern of activity it appears he is operating a money laundering scheme and the bank will not be a participant in it? (Of course, the existence or non-existence of a SAR does not come into any discussion whatsoever with anyone outside of the SAR committee.)
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#2260828 - 10/06/21 07:18 PM Re: Closing Suspicious Account - What to Tell Customer Sugar Coater
Amy S Offline
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Joined: Sep 2020
Posts: 51
I think I deleted my response. I just read a similar scenerio on another site. One advice there was to send them a letter stating ""Pursuant to the terms and conditions of the Checking or Savings Account Agreement, ABC Bank has the right to close your account "at any time upon reasonable notice to you". The letter does not mention BSA or SAR filing.

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#2260829 - 10/06/21 07:26 PM Re: Closing Suspicious Account - What to Tell Customer Sugar Coater
Sugar Coater Offline
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Yes, our COO spoke with him yesterday and told him that. He's not letting it go and wants a more definitive reason. In the past, that answer hasn't created much of an issue. We know what we CAN'T tell him...but how much we can/should we?
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#2260838 - 10/06/21 07:48 PM Re: Closing Suspicious Account - What to Tell Customer Sugar Coater
M Cockrell Offline
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Joined: Jan 2003
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Dallas, TX
Provided the "personal reasons" the customer thinks is the cause for closing the account are not predicated on any prohibited basis, you don't owe the customer any explanation beyond your right to terminate the account/relationship (per the standard "canned" disclosure language).

We reserve the right to close an account/relationship at any time, with sufficient notice. We are exercising that right.

If you believe the customer could become violent/present a danger to bank employees/other customers, consult with legal counsel (trespassing, restraining order, etc.)
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#2260839 - 10/06/21 07:55 PM Re: Closing Suspicious Account - What to Tell Customer Sugar Coater
Sugar Coater Offline
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No prohibited basis in this scenario. We do know that this person has had legal issues in other business ventures, so I feel like he may be a bit paranoid...just not paranoid enough to not launder money through our bank.
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#2260852 - 10/06/21 09:12 PM Re: Closing Suspicious Account - What to Tell Customer Sugar Coater
RockChucker, CAMS Offline
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The Country
The less you or anyone from your institution says about the situation, the better for your bank. If he doesn't like the answer he was given, who cares? Let him worry about it while you and your bank move on to more productive things.
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#2260853 - 10/06/21 09:15 PM Re: Closing Suspicious Account - What to Tell Customer Sugar Coater
BrianC Offline
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Joined: Nov 2004
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Illinois
Thank you for playing our game. You get no parting gifts.

Ok, maybe that is a little too crass, but I agree with the above.

"We're sorry, we can no longer service your account." is all that needs to be said. This is not open to debate.
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#2260856 - 10/06/21 09:47 PM Re: Closing Suspicious Account - What to Tell Customer Sugar Coater
Mike S Offline
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Joined: Mar 2021
Posts: 10
You've already determined that this person is outside your risk appetite and you don't want them as a customer. There is nothing to be gained by telling them anything other than that. The more you say, the more you open up your institution to [insert stuff you can't even think of here].

There's a 0.1% chance they own and operate a large network of cash-only veteran shelters that train service animals for refugee immigrants with children. Then they call the local news to say what a horrible bank you are.

We all know that isn't the case. smile

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#2260887 - 10/07/21 03:51 PM Re: Closing Suspicious Account - What to Tell Customer Sugar Coater
HappyGilmore Offline
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Pulling people out of the ditc...
Originally Posted by Sugar Coater
He's not letting it go and wants a more definitive reason.

he's not owed one. Perhaps a nice letter from your legal counsel stating "you have been notified your account is being closed based on our account agreement, further inquiries along this matter will be considered harassment and we will take appropriate legal action."
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