How Banks Track Your Money

Every Purchase On A Card Is Tracked To Find Possible Illicit Activity -- Like Eliot Spitzer's

(CBS)  Eliot Spitzer's money trail helped federal agents connect him to a prostitution ring. Red flags went up when he started moving money around various accounts. More than ever, investigators are keeping a close eye on financial transactions - including yours.

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You don't have to be a big spender, making large payments to questionable companies, to get scrutinized by your bank.

No, every purchase you make, down to that $7 sandwich and soda, gets screened, CBS News correspondent Nancy Cordes reports.

"That transaction, assuming you used a credit card or a debit card, is going to go into the system and it will be monitored with the rest of the transactions that go on in your account," said Mark Moorman, who works at SAS, a software company that helps banks review millions of transactions in search of suspicious activity.

"Let's say that that sandwich was followed by four cash deposits at four different ATMs within two hours. These are unusual behaviors," he said. "And these are the kinds of things that we are looking at."

A troubling transaction might trigger a "suspicious activity report." Banks send about 1 million of them to federal investigators every year.

They've always had to report payments of more than $10,000. But since 9/11, banks have started looking harder at small amounts, searching for money laundering, bank fraud and terrorist financing.

"For the great, great majority of people, there would never be any pattern in their account that would raise any kind of suspicion and would require us to file a report," said Ed Yingling, the president and CEO of America's Bankers Association.

That's because a strange transaction alone isn't enough to ring alarm bells. It's weighed against the individual's "risk score" - and every single account holder has one.

"Are they are a brand-new customer, have they had suspicious activities in the past, are they a international customer?" Moorman explained.

There's one other group of customers who get assigned a high-risk score. "PEPs," or Politically-Exposed Persons. That's judges, party officials and politicians.

As a governor and former attorney general, Eliot Spitzer would have known better than anyone that he was a "PEP," and therefore that his financial dealings were an open book.

[duckcreek99]

I invest all of my money in plastic, so I know where my money is. Plastic milk jugs buried in my back yard. I don''t put it in my matress because house would burn down.

[duckcreek99]

I invest all of my money in plastics. Using plastic milk jugs, shoving in the money and burying the jugs in my back yard. I don''t put money under mattress, house could burn down.

[Vierotchka]

forthepeopl1, living in Europe, I do as most Europeans - I boycott all American products (not that there are all that many). I got rid of my car and only use my legs and public transport to get around, so as to boycott oil as much as possible. I use my debit card only to draw money through ATMs, thus there is no way that my bank can monitor what I spend it on. I purposely don''t have a credit card, so I never buy anything online, either.

[Vierotchka]

This is why I only use my card to take money out via an ATM. The bank thus has no way of finding out how I use my money or what I spend it on. As I don''t have a credit card and therefore never buy anything online, my spending is beyond scrutiny.

Why Spitzer was busted
http://www.gregpalast.com/elliot-spitzer-gets-nailed/

[geohay1]

what is so suspicious about a sandwitch?

[michellem99-2009]

Sure they can track the likes of this man. I meant must not most. A married man hanging out with call girls..A state learder as that. Glad he stepped down.

[michellem99-2009]

I don''t carry cash on my person. I use a debit card. It is safer. Keithle1, I don''t care for coffee. I haved used a debit card for over 7 years. I don''t have a problem with the bank knowing where my money is used. It a most to record them in yer bank book.

[zootallures2]

Yea, but God is tracking you all.

[my2centss]

Wow they can keep track of all our money, but have no idea where it goes after we pay it in taxes.

[forthepeopl1]

DONT BUY ANYTHING BUT AMERICAN STUFF..

DONT BUY GAS FROM EXXON/MOBLE THEY ARE BUSH/CHENEY FREINDS IN SAUDI....

[forthepeopl1]

ALL AMERICANS BETTER PULL ALL THERE MONEY OUT OF ALL BANKS,AND GOVERNMENT CD''S, AND START STUFFING THE MATTRESS AGAIN..GO AHEAD GRANDMA/GRANDPA TELL THEM IT COMMING....

[keithle1]

People using debit cards to pay for $2 cups of coffee.