Everyday examples of suspicious activity in banking (and how to recognize them)

Fraud is on the rise. According to the FTC, people lost $12.5 billion to fraud last year, so there's a good chance that you or someone close to you has been affected.

Anyone can fall victim to fraud. According to age, younger people report losing money more often than older people, with 51% of teens 19 and under being victims of fraud. On the other hand, older adults who fell for scams lost more money than any other age group. 

Bank transfers are the most common payment method scammers use.

Fortunately, banks keep a close eye on transactions by monitoring every transfer. If they encounter a transaction that appears to be unusual or indicative of risky behavior, they file a Suspicious Activity Report (SAR) in accordance with the guidelines outlined by the Bank Secrecy Act (BSA) and the Financial Crimes Enforcement Network (FinCEN).

However, scams and technology are constantly evolving, so you also need to monitor them independently. Look for these common signs of suspicious activity in banking and know what to do when you spot red flags.

9 everyday red flags families might see

What’s considered suspicious activity in banking? Unusual user behavior, abnormal transaction patterns, and charges from unexpected locations are just a few of the things that might trigger further review by SAR systems.

These red flags aren’t always easy to spot, so here are some everyday examples to look for when protecting your family from the rise of financial fraud.

1. Card used in 2 or more cities on the same day

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Unless your family is on a road trip, it’s pretty unlikely that your teen would be using their card in multiple cities on the same day. Charges from unfamiliar locations should raise immediate suspicion.

2. Multiple failed logins

Misspelling or forgetting a password happens to all of us. However, repeated failed login attempts could also indicate suspicious behavior, particularly for senior loved ones**, who are more susceptible to fraud than other age groups. Help guide vulnerable family members to mitigate potential risks associated with mobile banking.

3. Small deposits followed by a large withdrawal

Large deposits can trigger fraudulent activity reports, so criminals might use multiple smaller deposits below the $10,000 reporting threshold to avoid detection. If these small deposits are quickly transferred to unknown external accounts or followed by a large withdrawal, it could indicate that a criminal third party is moving money around.

4. Unusual purchasing patterns or unknown merchants. 

Generally, transactions that don't align with your family's typical spending and saving habits are red flags. If you suddenly notice a shopping spree at a store no one in your family has ever visited, take immediate steps to freeze or pause your card.

It's easier to mitigate some of these risks with tools like Greenlight Infinity and Family Shield, which allow parents to set spending controls to approve purchases or restrict access to specific retailers. 

5. Sudden activity in a senior loved one's dormant account

Older adults may have accounts without regular activity if they don't receive a monthly income or handle their own shopping. Large withdrawals that suddenly start appearing in these accounts could signal exploitation or unauthorized access.

6. Deposits by people you don't know

Financial activity initiated by people without a clear family connection is always a red flag. Deposits from unknown sources may also be followed by requests to forward the money elsewhere or return it to the original sender.

7. A family member being secretive about account activity

We all deserve privacy. But if a loved one suddenly won’t talk to you about questionable activity in their account, take note. Reluctance to explain the source of unknown funds or the reason for transferring money to other accounts can be a warning sign.

8. Unexpected changes to family account ownership

Requests to add unknown parties to family, teen, or senior accounts are an obvious red flag. This could indicate that someone in your family gave away personal account info in a phishing attack. Discuss this request with your family members and see if a third party has compromised their account security.

9. Frequent currency exchanges or cross-border payments

People often send money to family members living abroad. But banks may take special notice of large or frequent cross-border payments. Know exactly where the money is going, especially when living with older adults. They’re often targeted by romance scammers requesting money via cryptocurrency or foreign exchange platforms.

How banks identify unusual activity

Major banks use automated systems that leverage advanced technology to collect transaction data from various sources. Using sophisticated algorithmic and behavioral monitoring, these systems:

• Recognize patterns in timestamps, locations, amounts, and other factors.

• Look for red flags, such as rapid transfers or unusual cross-border payments.

• Alert compliance teams to review risk scores, account profiles, and histories once anomalies are detected.

• Adapt to new detection methods, external data, and law enforcement guidelines.

The systems then compare this data to your customer profile to see if it’s consistent with your usual behavior. If it looks suspicious, the system flags the transaction and sends it to the experienced team of compliance officers for review. The team may then file a Suspicious Activity Report (SAR).

There’s no specific cash amount that triggers an SAR. Large transactions exceeding $10,000 and multiple smaller deposits totaling or exceeding $10,000 may be subject to further review.

How Greenlight helps families stay ahead of fraud

Greenlight Family Shield is an all-in-one money management tool that protects your family from cybercrime and identity theft* by:

• Monitoring suspicious activity* in most checking, savings, investing, or credit card accounts

• Alerting you and your loved ones*** in real time of suspicious activity

• Allowing you to set spending controls on debit cards

• Allowing additional caregivers to be another set of eyes on vulnerable accounts

Family Shield acts as a financial safety net, alerting you to threats so you can take steps to prevent identity theft** or stop fraudulent transactions.

What to do if you receive a suspicious activity alert

Here’s a five-step action plan to follow if you do receive a suspicious activity alert.

1. Review the alert. Learn how to spot common scams to avoid illegitimate transactions. 

2. Verify with family members. Check in with any relevant family members before taking action. Perhaps they have a valid reason for the unusual transaction.

3. Freeze or pause the card. If the activity appears to be fraudulent, shut down the active card before any more transactions are made.

4. Contact the bank or merchant. If necessary, contact your bank or the merchant to block future charges or request refunds.

5. Use online safety tools like Greenlight. Family Shield is a comprehensive family safety net that adds protection for future transactions*.

Make financial safety a family habit

Avoiding real-world financial threats starts at home. Discuss money safety with your whole family, and alert each other if you become aware of new scams.

Protect your family from financial fraud. Greenlight's Family Shield helps you monitor multi-generational financial accounts in one place and alerts you to any suspicious activity. It's the #1 family safety and money management tool for everyone from kids to older adults. Try Greenlight, one month risk-free.† 

*Premium monitoring services are offered by Experian.

**Insurance offered by Acrisure, LLC is provided by ACE American Insurance Company and its U.S.-based Chubb underwriting company affiliates. www.chubb.com. Additional details can be viewed here. See link for policy information. Insurance Products are not insured by the FDIC or any federal government agency and are not a deposit or other obligation of, or guaranteed by, any bank or bank affiliate.

***Loved ones refers to covered family members as defined in the policy i.e. supported adults for which you control or assist with their finances.