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"However, the filing of an SAR does not require the bank to cease doing business with the client in question." This feels broken. Was this intended to prevent

"However, the filing of an SAR does not require the bank to cease doing business with the client in question." This feels broken. Was this intended to prevent competitors from falsely filing SARs against each other to freeze their business? What are the penalties for abusing this system?

vorpalhex 6y ago
A SAR just means activity is suspicious. That's it - a SAR is not by itself evidence of wrongdoing, just a report to take a deeper look. "Hey, this persons makes mostly foreign transactions with vague companies" is a SAR. That's not a crime, and it may not be criminal behavior - it's just an indicator that someone should look closer. Can you imagine if your bank closed your account and refused to do business with you, without any kind of trial or notification, just because you did something that triggered a fraud measure? Or to put this another way, how many times have you had to call your credit card provider because they stopped a transaction just because it was suspicious, even when it wasn't?
- oasisbob 6y ago
  > how many times have you had to call your credit card provider because they stopped a transaction just because it was suspicious, even when it wasn't? Ugh. I'd pay more for a credit card which didn't block my own transactions. Using a US credit card abroad can be seriously frustrating. The only thing worse than rapidly increasing airfares on small airlines with websites which barely work is when your credit card refuses to complete the transaction, requiring multiple international phone calls to resolve.
  - greggman3 6y ago
    I've had that happen too many times. I've had basically good luck with Capital One provided I tell them in advance which country I'll be in. I think at this point they let me set that online.
- TallGuyShort 6y ago
  Or to put it another way, how do you like it when your content gets DMCA'd with no investigation and no recourse, because the enforcer doesn't want the liability and can't actually investigate? That's what would happen is SARS had to be treated as though they were proof of crimes.
k2enemy 6y ago
> Banks and other financial institutions file SARs when they believe a client is using their services for potential criminal activity. It sounds like banks file SARs about their own clients. I'm guessing they don't have to cease doing business with the client because that would create an incentive not to file SARs.
- piker 6y ago
  ...and tipoff the 'suspicious' actor
arafa 6y ago
SARs are merely suspected illicit activity. The feds investigate and see if the claims have merit. They can also have varying degrees of severity which can affect account closure decisions.
throwaway0a5e 6y ago
It's a "suspicious activity report" not an "illegal activity report".
sailfast 6y ago
The Feds determine if the activity is illegal. SARS are filed as part of the bank’s duty to report and they are liable if they don’t report the activity. You want to err on the side of “more SARs” so you are covered. But if they’re leaked - that means reputational damage risk is higher so you’ll get less reports from banks and likely make it a lot harder to see patterns of illegal behavior. That’s why this agreement is in place.
beh9540 6y ago
SARs are required to be reported for all daily cash deposits greater than $10K by the Bank Secrecy Act.[1] Cash heavy businesses could easily hit this level, as well as large transactions that are perfectly legal, so you wouldn't want to stop doing business with a customer, just because they deposited a large amount of cash. [1] https://www.occ.treas.gov/topics/supervision-and-examination/bank-operations/financial-crime/suspicious-activity-reports/index-suspicious-activity-reports.html https://www.occ.treas.gov/topics/supervision-and-examination...
- vmception 6y ago
  and the threshold is not inflation linked, or location linked. it is just a 50 year misused law that has successfully spent the last half-century stigmatizing the concept of having money to move in the minds of people without money who want it.
- wemblee 6y ago
  I mentioned this above on another comment but you're confusing SARs and CTRs.

vorpalhex 6y ago

A SAR just means activity is suspicious. That's it - a SAR is not by itself evidence of wrongdoing, just a report to take a deeper look. "Hey, this persons makes mostly foreign transactions with vague companies" is a SAR. That's not a crime, and it may not be criminal behavior - it's just an indicator that someone should look closer. Can you imagine if your bank closed your account and refused to do business with you, without any kind of trial or notification, just because you did something that triggered a fraud measure? Or to put this another way, how many times have you had to call your credit card provider because they stopped a transaction just because it was suspicious, even when it wasn't?

oasisbob 6y ago
> how many times have you had to call your credit card provider because they stopped a transaction just because it was suspicious, even when it wasn't? Ugh. I'd pay more for a credit card which didn't block my own transactions. Using a US credit card abroad can be seriously frustrating. The only thing worse than rapidly increasing airfares on small airlines with websites which barely work is when your credit card refuses to complete the transaction, requiring multiple international phone calls to resolve.
- greggman3 6y ago
  I've had that happen too many times. I've had basically good luck with Capital One provided I tell them in advance which country I'll be in. I think at this point they let me set that online.
TallGuyShort 6y ago
Or to put it another way, how do you like it when your content gets DMCA'd with no investigation and no recourse, because the enforcer doesn't want the liability and can't actually investigate? That's what would happen is SARS had to be treated as though they were proof of crimes.

k2enemy 6y ago

> Banks and other financial institutions file SARs when they believe a client is using their services for potential criminal activity. It sounds like banks file SARs about their own clients. I'm guessing they don't have to cease doing business with the client because that would create an incentive not to file SARs.

piker 6y ago
...and tipoff the 'suspicious' actor

arafa 6y ago

SARs are merely suspected illicit activity. The feds investigate and see if the claims have merit. They can also have varying degrees of severity which can affect account closure decisions.

throwaway0a5e 6y ago

It's a "suspicious activity report" not an "illegal activity report".

sailfast 6y ago

The Feds determine if the activity is illegal. SARS are filed as part of the bank’s duty to report and they are liable if they don’t report the activity. You want to err on the side of “more SARs” so you are covered. But if they’re leaked - that means reputational damage risk is higher so you’ll get less reports from banks and likely make it a lot harder to see patterns of illegal behavior. That’s why this agreement is in place.

beh9540 6y ago

SARs are required to be reported for all daily cash deposits greater than $10K by the Bank Secrecy Act.[1] Cash heavy businesses could easily hit this level, as well as large transactions that are perfectly legal, so you wouldn't want to stop doing business with a customer, just because they deposited a large amount of cash. [1] https://www.occ.treas.gov/topics/supervision-and-examination/bank-operations/financial-crime/suspicious-activity-reports/index-suspicious-activity-reports.html https://www.occ.treas.gov/topics/supervision-and-examination...

vmception 6y ago
and the threshold is not inflation linked, or location linked. it is just a 50 year misused law that has successfully spent the last half-century stigmatizing the concept of having money to move in the minds of people without money who want it.
wemblee 6y ago
I mentioned this above on another comment but you're confusing SARs and CTRs.