Red Flags

A red flag is a prompt, not proof. Many innocent customers trigger one, and many criminals show none. Examples include transactions with no clear purpose, activity that does not fit the customer's profile, reluctance to give information, use of complex structures, unusual speed, third-party payments and cash deposits just under reporting limits. Regulators, financial intelligence units and industry groups publish lists of indicators by sector and by crime type, and firms build them into transaction monitoring rules and training. When staff see a flag, they gather facts, ask the customer, consider the whole picture and decide whether to escalate or to report. One flag alone usually does not justify a report; several together weigh more. Lists need updating as criminals adapt. Staff trained to read flags raise alerts early, and lists drawn from real cases give new joiners a head start; the alert is where detection begins.

A university finance office notices that a student who paid fees in full has overpaid by a large sum and asks for the excess to be refunded to a third party's account in another country. Each request alone has an innocent explanation, but together they do not look like normal fee payments, so the clerk raises an internal alert.