— Monte Francis (@MonteReports) March 26, 2016
A San Francisco man's online payment to a dog walker was frozen because the bank mistook his dog's name written in the memo line, "Dash," for "Daesh," a common name for ISIS.
According to a report by KTVU in San Francisco, Bruce Francis noticed that his payment to a dog walker for walking his 9-year-old service dog (Francis has multiple sclerosis) hadn't gone through. When he checked his Chase account, he found an ominous message:
Please be advised that we have not completed your payment as it is under compliance department review for a possible OFAC or JPM risk policy issue. Our legal compliance department has requested you to provide the following information -- for Dash. PROVIDE REFERENCE TO "DASH," IF COMPANY, PROVIDE ADDRESS, OWNERSHIP AND PURPOSE OF PAYMENT.
After seeing the message, Francis called OFAC, the U.S. Treasury's Office of Foreign Assets Control.
"The Treasury Department official said, 'Yes, your instinct is right. Your dog's name is similar to that of a terrorist organization,'" Francis told KTVU. "I thought to myself, 'Great, they are stopping the world's stupidest terrorists.' "
Despite the mix-up, Francis supports the monitoring program, in principle.
"Anything that we can do to stop terrorists, and the funding of terrorists, let's do it," Francis told KTVU.
False positives happen
While confusing a dog's name with a common name for ISIS isn't the norm, errors definitely happen, says David Schwartz, CEO of the Florida International Bankers Association.
Banks are given a list of terms by agencies like OFAC, including names, to look for. Because large banks like Chase process hundreds of thousands of payments each day, Schwartz says, the first steps in screening for those terms is typically done by computers to save time.
"If you had to look at every single check that goes through, you'd never have time to do it," Schwartz says. "They need the automation to be able to do the first line of screening, and then if there is some type of red flag that triggers an alert, they can take that extra step."
Not surprisingly, the computers sometimes goof and confuse something innocuous like a dog's name for a sign the payment is being used to fund terrorism.
"These filters will pick up approximate matches, and of course send up a red flag to the bank, which will mean the analysts have a little work to do to see if it's a true hit or if it's a false positive," Schwartz says. "He'll see, OK, it wasn't Daesh, it was Dash, so right there, they can say, 'Ok, that's a mistake.'"
People with common names can find themselves caught up in such false positives often, so investigators will sometimes have to adjust their filters so particular customers don't trigger false positives again and again.
ISIS screening a big priority
Choking off funding to ISIS is such a high priority for the U.S. that terms relating to the group are probably more closely watched than almost any other, says Brian Monroe, director of content and business development at the Association of Certified Financial Crime Specialists.
"Banks are already under intense regulatory scrutiny for their financial crime compliance programs and there is a massive focus by investigators in countries around the world to cripple ISIS at all levels," Monroe says.
The stakes are so high that banks are unlikely to take any chances when it comes to screening payments, he says.
"While no doubt wanting to do their part to stop the murderous extremist group, banks also know full well that if regulators or authorities found out that a bank supported ISIS, even accidentally or tangentially, it would be a reputational nightmare for the institution," Monroe says.
What do you think? Have you ever had a payment flagged by OFAC? Is this an invasion of privacy or a necessary step to fight terrorism?
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