Recognizing unusual transactions
As a service provider (Factoring company), you are aware of the practices in your industry. Determining whether a transaction is classified as unusual depends, to a great extent, on your professional opinion. Your opinion corresponds with what is considered unusual within your profession. In addition to your opinion, there are circumstances of an unusual nature which must therefore be reported.
If one of the scenarios described in the general examples below (which are not exhaustive) arises, then this is cause to further examine whether the transaction could be connected with money laundering and/or terrorist financing. If you suspect activities of money laundering or terrorist financing, then you must report it.
Red Flags – Factoring company
- The client pays in cash (in small cash denominations, with uncounted cash, in unusual packaging)
- The client provides items as a guarantee (as collateral) which unmistakably originate from criminal activity
- The client frequently provides items as security (collateral) but does not repay its debt or does not demonstrate any interest in repaying the loan or in obtaining its items;
- This client provides items as security (collateral) way below the market value for said items