SPECIAL REPORT: Suspicious activity reports surge; 2023 filings on pace for another record - Thomson Reuters Institute (2024)

The volume of Suspicious Activity Reports (SARs) filed by U.S. financial institutions has surged amid a pandemic-era increase in fraud, our new report shows

Financial institutions operating in the United States are filing soaring numbers of Suspicious Activity Reports (SARs), with the total number of SARs filed in 2022 surpassing 3.6 million filings, an increase of 57% from pre-pandemic 2019 levels.

More importantly, based on current predictions, SARs are on pace for another record year of filings in 2023.

To delve into this development further, the Thomson Reuters Institute has compiled a special report based on analysis of public datareleased by the U.S. Treasury Department’s anti-money laundering (AML) unit, FinCEN, that provides a closer look at the trends, many of which were driven by pervasive fraud during the pandemic crisis.

As the report demonstrates, SARs filings soared in virtually all categories. However, massive spikes in human exploitation, elder fraud, and government-related benefit scams are noteworthy. Such vulnerable populations have grown in both size and susceptibility, especially among migrants and the elderly.

Suspicious Activity Reports 2023

SPECIAL REPORT: Suspicious activity reports surge; 2023 filings on pace for another record - Thomson Reuters Institute (1)

Although some attribute the spike in filings to technology improvements that are better at detecting suspicious activity and numerous regulatory warnings that have stressed the importance of filing SARs, actual increases in crime reported by other agencies, such as the Federal Bureau of Investigation (FBI), closely correlate with the sharp increases in actual fraud in many categories.

Some skeptics argue that so-called defensive SAR filings — those filed when a financial institution may not truly believe flagged activity is tied to crime but wants to shield itself from potential regulatory criticism — have driven the growth in SAR numbers. However, the latest numbers and the report paint a much larger, more nuanced picture.

In addition to the pandemic-driven causes, check fraud and other payment-related frauds are surging, according to the data. The report also highlights important seasonal trends over the past nine years that show how January and February typically reflect below-average SAR filing volumes, while late spring and late summer were often particularly busy.

The report relies on data from January 2014 through the end of the first quarter of 2023 and was obtained from the FinCEN SARs database. The data is a helpful benchmark for financial institutions’ risk, compliance, and anti-fraud leaders. It can be used to contrast their internal data against the broader market-affecting industry peers.

Numerous published regulatory red flags or warnings in critical areas such as elder fraud, postal fraud, check fraud, and human exploitation are also included in the report. The information is useful to help firms better identify and report suspicious transactions.

The data in the report can be used for budgeting, planning, and comparison purposes and presentations by AML, sanctions, and financial crimes departments to their organizations’ senior management and boards of directors.

As the report notes, failure to report such suspicious activity by financial institutions often can result in steep penalties. More importantly, such failures can have life-and-death implications because the information enables law enforcement to uncover and prosecute such illegal activity.

You can download a copy of Thomson Reuters Institute’s special report on SARs by filling out the form below:

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SPECIAL REPORT: Suspicious activity reports surge; 2023 filings on pace for another record - Thomson Reuters Institute (2024)


SPECIAL REPORT: Suspicious activity reports surge; 2023 filings on pace for another record - Thomson Reuters Institute? ›

A surge in SARs

What triggers a Suspicious Activity Report? ›

If a customer does something obviously criminal – such as offering a bribe or even admitting to a crime – the law requires you to file a SAR if it involves or aggregates funds or other assets of $2,000 or more.

What is the difference between a Suspicious Activity Report and a suspicious transaction report? ›

A suspicious transaction report (STR) is generally considered an interchangeable term with suspicious activity report (SAR), as both terms refer to the mandatory form that financial institutions must file with the Financial Crimes Enforcement Network (FinCEN) whenever there is a suspected case of money laundering or ...

What happens if a SAR is filed against you? ›

However, if there is sufficient evidence linking you to a potential crime, such as money laundering, it may result in a formal investigation by law enforcement authorities. In some cases, filing a SAR may also result in your assets being frozen or seized by law enforcement agents.

How many SARs are filed in 2023? ›

If this trend continues, financial institutions and other regulated organizations are on track to file around 3.8 million SARs in 2023, slightly surpassing the 3.75 million SARs predicted in the Thomson Reuters SAR Special Report published earlier this year.

What are examples of suspicious activity? ›

Leaving packages, bags or other items behind. Exhibiting unusual mental or physical symptoms. Unusual noises like screaming, yelling, gunshots or glass breaking. Individuals in a heated argument, yelling or cursing at each other.

What would be considered suspicious activity? ›

Suspicious activity can refer to any incident, event, individual or activity that seems unusual or out of place. Some common examples of suspicious activities include: A stranger loitering in your neighborhood or a vehicle cruising the streets repeatedly. Someone peering into cars or windows.

What are the red flags for suspicious transaction reporting? ›

A large amount of cash deposited in an account at once. Payment received in account, not matched with goods shipped or trade-based money laundering. Unexpected repayment of overdue credit amount. Transaction inconsistent with customer's business profile.

What do banks flag as suspicious activity? ›

Suspicious transactions are any event within a financial institution that could be possibly related to fraud, money laundering, terrorist financing, or other illegal activities.

When must a suspicious activity report be filed? ›

A financial institution is required to file a suspicious activity report no later than 30 calendar days after the date of initial detection of facts that may constitute a basis for filing a suspicious activity report.

What happens after a suspicious activity report? ›

Once the financial company has submitted a suspicious activity report with the Financial Crimes Enforcement Network (FinCEN, a division of the U.S. Treasury), the appropriate governing body will investigate the issue and cross-check other law enforcement databases to see if there are any connections with other illegal ...

Who investigates suspicious activity reports? ›

law enforcement officials throughout the United States. Under the system, FinCEN is designated as the single filing point for suspicious activity reports and is responsible for distributing the information within the government.

What happens after a suspicious activity report is filed federally? ›

The SAR is filed by the financial institution that observes suspicious activity in an account. The report is filed with the Financial Crimes Enforcement Network, or FinCEN, who will then investigate the incident. FinCEN is a division of the U.S. Treasury.

What amount of money triggers a suspicious activity report? ›

Dollar Amount Thresholds – Banks are required to file a SAR in the following circ*mstances: insider abuse involving any amount; transactions aggregating $5,000 or more where a suspect can be identified; transactions aggregating $25,000 or more regardless of potential suspects; and transactions aggregating $5,000 or ...

What are the examples of suspicious activity money laundering? ›

Suspicious activity or transactions
  • a customer has tried to make an exceptionally large cash payment.
  • the customer behaved strangely, or made unusual requests that did not seem to make sense.
  • the transaction they wanted to make just did not add up commercially.

How to identify suspicious transaction report? ›

Identifying suspicious transactions often involves looking for certain red flags. These indicators can vary widely but typically include: Unusual Transaction Size or Frequency: Transactions that are unusually large or frequent compared to the customer's usual activity.

What is the main difference between suspicious transactions and suspicious activities? ›

Difference Between SAR and STR – A Comparative Overview
Suspicious Activity Report (SAR)Suspicious Transaction Report (STR)
PurposeTo report activities that are suspicious, with no minimum transaction amount required.To report transactions specifically that are suspicious, usually above a certain threshold.
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Apr 22, 2024

What is the difference between str and ctr? ›

The core function of FMU is the receipt of Suspicious Transaction Reports (STRs) and Currency Transaction Reports (CTRs) and after analysis disseminate financial intelligence to law enforcement agencies/Regulators/Supervisors for inquiry or investigation of ML/TF and other related offences including any administrative ...

What is the difference between STR and UTR? ›

Suspicious Transaction Reports (STR): STRs can be uploaded or created manually. Unusual Transaction Reports (UTR): UTR relates to all unusual (cash) transactions that might be suspicious.

What is the difference between UAR and SAR? ›

UARs vs SARs

As such, an unusual activity report can be thought of as something of a “pre-SAR.” While unusual activities should be treated with the same level of caution as suspicious activities reported through traditional SARs, the trigger for a UAR is often more uncertain and vague.

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