We purchase loans from our affiliate. They run customer info through fraud checks and get what is called "Red Flags" alerts. These alerts are sent to the BSA Officer to review for suspicious activity. A majority of these issues are occupancy, income or employment alerts where their systems can not verify the information to be exact. Do you see any reason why these issues would be SAR reportable? I see no fraud in something that could be validated with a little more effort.

I would only file a SAR if the transaction turned out to be suspisious based on the further investigation performed by your BSA officer.

You don't file SARs based strictly on "red flags". Get the facts first. If you find the customer(s) deliberately gave false information, then a SAR may be appropriate.