There is no "federal government" list other than sanctions/commerce department lists. These are both public. Either both banks decided they didn't want to deal with Pakistan anymore (maybe there was a warning about Pakistan by the Treasury department or in some AML publication they read, Pakistan was also recently on the FATF greylist) or he or the people sending him money mistakenly ended up on something like the [World-Check](https://en.wikipedia.org/wiki/World-Check) database. Someone can publish slander about you online and the monkeys that run World-Check will automatically find the article and put a note on their file about you saying you are "high risk."
IIRC, there is a commercial service sold to fins which eases SAR reporting and the vendor of the service shares info between fin firms. Back office integrations are opaque to front-line fin personnel, so this becomes mysterious to customers.
disclaimer - work for a fintech. Buried in the article is this really important point:
> The SARs are largely kept under wraps. Customer service representatives might not know if such a report was filed (or anything about its contents), which may be why it can be hard for them to explain account closures to customers. “It is held to a high level of confidentiality, and it is a crime to disclose that a SAR has been filed,” Ms. Cohen Levin of Sullivan & Cromwell said.
Unfortunately if you or a transaction of yours "looks suspicious" or show up on any of the various AML/anti-terror lists/filters - which are full of false positives and nonsense - BY LAW we cant tell you why your account was closed. It sucks, people are rightfully angry. It doesn't seem worth it to me - if you are actually doing BadThings and your account gets closed, i'm sure you know why. Being opaque is really not providing much benefit to law enforcement here, at the cost of massive inconvenience for many.
Now, banks are also guilty of hiding behind these laws for non-mandatory account closure reasons - when they have internally decided they dont want you as a customer for whatever reason. That also sucks IMHO. Perhaps changing the law would remove the plausible deniability in these situations and lead to more transparency.
I think the intent is to keep the bad actors from knowing exactly how they were nabbed so they don't know what to do differently the next time around.
I would be amazed if they aren't punishing a lot more innocents than guilty, though. These days the government loves to do an end-run around the 5th amendment--innocent until proven guilty should apply to all government or government-directed actions (I consider the bank closing your account because you did something the government considers suspicious to be a government action), but we have been using it for toilet paper for quite a while now.
Article says 4% of SARs lead to law enforcement followup (and of those how many actually result in a conviction? Probably not even a third of that). So 95%+ of them are useless! The current system has terrible incentives because there are massive penalties for not filing but no penalty for useless filings. So they just file and file and file...
I mainly agree with you the system is abused flagrantly, on the other hand playing devils advocate potentially the low amount of follow up is because shutting an account has 0 risk to life or limb of anyone involved. If they shut down the shared bank account being used to hold all the money to a (poorly run albeit) drug empire you just put that org significantly in the hole, and the person doing the dirty work is sipping coffee in their pajamas completely ignorant to the outcome of their perscribed click.
> It doesn't seem worth it to me - if you are actually doing BadThings and your account gets closed, i'm sure you know why.
Hiding the reason is such a woefully small inconvenience for actually bad actors. But the 95% of regular folk that get caught up in it can go to hell I guess?
It does not happen only with Banks, there are many cases where innocent people, that are flagged by fraud detection machine learning algorithms in social media or any kind of service, are banned or have accounts frozen without any explanation or warning due the false positives results or bias in the machine learning algorithms. In lots of cases, companies operating fraud detection algorithms don't provide any way to appeal and do not have any human in the loop for reviewing the decisions taken by the algorithm due cost saving or scaling. In general, no explanation is given to a person flagged by the algorithm in order to not disclose how it works or help bad actors. In the case of financial institution, other reason for no giving explanation is the legal AML requirement that forbids financial institutions from telling a customer that he or she was flagged. It is becoming a Kafkaesque world, the AI is more and more making decisions about our lives without due process and right to appeal/recourse.
Here some similar case:
- AI tool flagged parents with disabilities: https://apnews.com/article/child-protective-services-algorithms-artificial-intelligence-disability-02469a9ad3ed3e9a31ddae68838bc76e
- https://www.theguardian.com/technology/2022/aug/07/ai-eu-moves-to-beat-the-algorithms-that-ruin-lives
- https://ico.org.uk/for-organisations/guide-to-data-protection/guide-to-the-general-data-protection-regulation-gdpr/automated-decision-making-and-profiling/what-does-the-uk-gdpr-say-about-automated-decision-making-and-profiling
- U.S. warns of discrimination in using AI to screen job candidates : NPR / https://www.npr.org/2022/05/12/1098601458/artificial-intelligence-job-discrimination-disabilities
- Finding it hard to get a new job? Robot recruiters might be to blame | Work & careers |/ https://www.theguardian.com/us-news/2022/may/11/artitifical-intelligence-job-applications-screen-robot-recruiters
- https://www.vice.com/en/article/jgq35d/how-a-discriminatory-algorithm-wrongly-accused-thousands-of-families-of-fraud
- Handling Discriminatory Biases in Data for Machine Learning - by Matthew Stewart, PhD (it shows how to make ML algorithms fair) / https://towardsdatascience.com/machine-learning-and-discrimination-2ed1a8b01038
14 comments
[ 0.18 ms ] story [ 29.7 ms ] threadIn reality its coercive, an intolerable act, and the last time we saw these things was 1767-1776.
Its beyond stupid, but the people doing these things have incentives to do them.
Here's an interesting related article. https://archive.is/HuXGQ
> The SARs are largely kept under wraps. Customer service representatives might not know if such a report was filed (or anything about its contents), which may be why it can be hard for them to explain account closures to customers. “It is held to a high level of confidentiality, and it is a crime to disclose that a SAR has been filed,” Ms. Cohen Levin of Sullivan & Cromwell said.
Unfortunately if you or a transaction of yours "looks suspicious" or show up on any of the various AML/anti-terror lists/filters - which are full of false positives and nonsense - BY LAW we cant tell you why your account was closed. It sucks, people are rightfully angry. It doesn't seem worth it to me - if you are actually doing BadThings and your account gets closed, i'm sure you know why. Being opaque is really not providing much benefit to law enforcement here, at the cost of massive inconvenience for many.
Now, banks are also guilty of hiding behind these laws for non-mandatory account closure reasons - when they have internally decided they dont want you as a customer for whatever reason. That also sucks IMHO. Perhaps changing the law would remove the plausible deniability in these situations and lead to more transparency.
I would be amazed if they aren't punishing a lot more innocents than guilty, though. These days the government loves to do an end-run around the 5th amendment--innocent until proven guilty should apply to all government or government-directed actions (I consider the bank closing your account because you did something the government considers suspicious to be a government action), but we have been using it for toilet paper for quite a while now.
> It doesn't seem worth it to me - if you are actually doing BadThings and your account gets closed, i'm sure you know why.
Hiding the reason is such a woefully small inconvenience for actually bad actors. But the 95% of regular folk that get caught up in it can go to hell I guess?
Here some similar case: