The Financial Crimes Enforcement Network and banking agencies today issued a joint statement clarifying that confidentiality requirements related to suspicious activity reports do not prevent banks from communicating with customers about potentially fraudulent transactions, account closures or other potentially illicit activity.
Last year, the Federal Reserve, FDIC and Office of the Comptroller of the Currency requested public input on potential actions to help consumers, businesses and financial institutions mitigate the risk of payments fraud, particularly check fraud. Several commenters raised concerns about bank personnel’s ability to communicate with a customer when a bank may file or has filed a SAR on potentially fraudulent activity.
The joint statement notes that under Bank Secrecy Act rules, financial institutions are prohibited from disclosing the existence of a SAR, but this prohibition is not necessarily a bar to disclosing the underlying facts and documents in communications to customers, even if a reasonable and prudent person might suspect or be able to deduce that a SAR was or may have been filed. The joint statement provides several examples of permitted communications that would typically not reveal a SAR exists, including notifying customers that a delay or restriction may be related to fraud “or other suspicious activity.”
“The BSA and its implementing regulations do not prohibit banks or credit unions from communicating with a customer or other person who may be the subject of a SAR about potentially fraudulent or other suspicious transactions involving the customer’s account or notifying the customer of the bank’s or credit union’s intention to close the account for potentially fraudulent or other suspicious activity, so long as that communication does not reveal the existence of a SAR,” the agencies said.
