What constitutes suspicious activity?
In the real-world, suspicious activity means anything which makes you uneasy, that something is out of place, inconsistent. It can be a ‘gut feeling’ that something is not right, that the client activity makes no sense, or that the client was acting ‘weird’. While some cases will be clear cut, identifying others will require a degree of judgement and experience.<br/><br/>
Suspicion is generally prompted by what are called ‘red flags’. If you ignore a red flag, you may be liable for failing to report. <br/><br/>
Some examples of ‘Red Flags’ are:<br/><br/>
- Customer refuses or is unwilling to provide information, or a reasonable explanation for activity; <br/>
- Client is domiciled in a jurisdiction different to where services are sought without a reasonable rationale; <br/>
- Funds flow that is unexplained, repetitive, unusually large or show unusual patterns; <br/>
- Sudden and unexplained changes in client trading partners or trading activity.<br/>
- A customer transacts in an overly complicate way; <br/>
- Overly complex ownership of a client business; <br/>
- Customers who suddenly become uncooperative or aggressive; <br/>
- Transactions that make no commercial sense; <br/>
- Customers who offer incentives or inducements to do things; <br/>
- Client asks for information to be removed from trades; <br/>
- Sudden unexplained increase in the customer’s turnover.