Are We Being Watched by Our Bank?

by Kristina on April 6, 2011 · 0 comments

There are several different types of transactions that are considered to be high risk by most Financial Institutions.  These transactions include regular day to day transactions that many of us may perform several times throughout the year.  Although our transactions may be approved, we have to always wonder what is going on behind the scenes and who is really watching our bank accounts.

Deposit Transactions over $10,000 are reported to the Federal Government.  This is a requirement by law, and it is non negotiable.  Since this is public information, most criminals keep their deposits under $10,000, if they are smart.  Therefore, most large deposit transactions are legit. As clients we may be required to sign an affidavit stating where the money came from and how we got it.  This removes our Financial Institution from any liability in case the money was obtained from illegal sources.

I had a client who declared he was an “immigration officer” each time he made a large deposit.  He signed an affidavit that the money was from his legal costs for helping people immigrate to the country.  However, he was known throughout the neighbourhood as the go to guy who could help people enter the country illegally with forged immigration papers…but that’s just a rumour.

Wire Transfers to Overseas Destinations.  All wire transfers are monitored by our financial institutions as well as other financial agencies.  It is very rare that our local Financial Institution can send money directly to a bank branch overseas.  Most wire transfers are sent via a regulatory bank in New York or Switzerland.

When we send money to our families or friends overseas, we can rest assure that our money is being watched by our bank.  If our wire transfer is over $10,000 we will have to explain the source of the money, not the financial institution where it is coming from because they have that information, but how we obtained the money for the wire transfer.

People don’t like it when bank employees ask too many questions about the destination of their money.  Whether the money is legally earned or illegally obtained customers don’t like the bank to know their business.  People often feel that they shouldn’t have to explain where their money came from because the bank should be happy to have their business.

Cash Advances on our Credit Cards.  Next time you go to the ATM to take a cash advance from your credit card, think about who is watching your transaction; and I am not referring to the security camera at the ATM.  Cash Advances are monitored in several different ways by our Financial Institution.  The way that we use our credit card is kept on file by our financial institution, as well as reported to the credit bureau.  If we often use our credit card for cash advances instead of retail purchases, it can work against us the next time we apply for credit.

Our Mortgage Down Payment.  For those of us who have bought a house, did the mortgage representative ask you the source of funds for your mortgage payment?  The mortgage representative has to declare the source of your mortgage down payment to the credit center.  Whether we saved our down payment or it was gifted to us, is taken into consideration when the bank chooses whether or not to approve our mortgage.

Who will be watching your next financial transaction?

Photo by Mike Kline

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