US Regulators Clarify Customer Communication on SAR-Related Fraud
A joint statement from five federal agencies confirms that financial institutions can discuss the underlying facts of suspected fraud with customers without violating SAR confidentiality rules.
Five US financial regulators, including FinCEN and the Federal Reserve, issued a joint statement clarifying a key aspect of anti-money laundering compliance. The guidance confirms that banks can discuss the underlying facts, transactions, and documents related to suspected fraud with customers, even if the activity has led to a Suspicious Activity Report (SAR), so long as they do not reveal the existence of the SAR itself.
This resolves a significant operational tension for financial institutions, which often defaulted to silence when restricting or closing accounts to avoid violating the Bank Secrecy Act’s strict SAR confidentiality provisions. The statement explicitly permits notifying customers that an account action is related to suspected fraud or providing educational warnings about common schemes. This unified regulatory position gives institutions greater confidence in communicating transparently with customers, including those who may be victims of fraud. Compliance teams should review and update customer-facing scripts, internal policies, and staff training to align with the guidance. The clarification also has implications for discovery in civil litigation involving customer accounts.