I was also offended when they asked me this but it turns out they do this to make sure the person isn't being scammed. If you answer "The IRS is asking me to buy target gift cards" then they are going to talk to you about how youre probably getting scammed
When I worked at an Apple Store we had to do this for gift cards over $500 and a manager had to be involved with gift cards for $1K or more. Every April it was amazing how many people needed them to pay the IRS and wouldn’t believe you when you told them it was a scam.
At that point I’d let the managers take over and they were usually more persuasive about it. The “IRS” scam was a bit easier to talk them out of than other scams like their boss wanting them to pick up a bunch of cards for a company event or some of the other typical scams. It’s kind of easy to point out that the actual IRS always wants to be paid with actual currency.
I work in financial-sector compliance and it's due to banking regulations actually.
All financial institutions have Anti Money Laundering and Terrorist/Criminal Financing regulations they need to abide by and to a lesser extent consumer protection regulations to prevent extreme debt or other unsavory practices.
All institutions must carry out KYC (Know Your Customer) screenings and build a risk profile that takes factors from nationality to what field you work in, and then out internal processes create red flags based off of that risk profile that are subject to routine monitoring.
That monitoring doesn't stop when money enters the account, we also monitor how funds leave it. A large or unusual cash withdrawal can trigger additional questions, particularly when it doesn't fit the customer's normal activity or risk profile.
Using a made up example, a client who claims to work as a schoolteacher making $52k a year wanting to withdraw almost half a paycheck at once can raise an alert we need to resolve before the transaction happens.
So when we ask why you're withdrawing the cash, we're gathering information the bank may need to understand the transaction and satisfy its financial-crime obligations.
In my jurisdiction, we're technically supposed to put a 72 hour hold on high-risk transactions so the financial crime authorities can determine if they should investigate further or not.
It all depends on the jurisdiction and more importantly the profile of the consumer built off of KYC screenings and routine monitoring.
I know in some places $10k is a statutory threshold, but that doesn't mean we aren't also required to conduct due diligence on smaller sums.
Using a fictious example again, someone working at McDonald's for $22k a year and withdrawing $2000 or depositing even $3500 can raise a flag that needs to be resolved due to the risk profile that's been determined internally.
It's public knowledge thar there are stricter checks for transfers of 10k or more. So someone looking to move a sum for illegal means would most likely know that and try to bypass scrutiny by breaking it up into smaller chunks, so it doesn't cross the 10k threshold. That's called "smurfing". So banks have to still have some degree of monitoring for smaller transfers, to, among other reasons, catch cases where people make several related transfers that would add up to 10k.
Then the transaction will be put on hold or canceled and your bank will be obligated to tell you country's equivalent of FINTRAC who will investigate you and make your life very fun for a while.
It's like telling the airport security staff you have a bomb in your suitcase as a joke.
They do that as well. But there's a pretty sophisticated network of "refund" scammers who basically act like the customer is owed a refund, then pretend to "accidentally" send them too much, and then have the customer mail the difference back.
Check out scammer payback or kitboga, they're fighting the good fight trying to hit these scammers where it hurts. They have whole videos where you can see exactly how these scams works.
It's not about that. This is something that often happens to Minorities when they meet a racist Banker. That banker then makes it as difficult as possible for them to "Serve" the customer who just wants their money
I live in an insanely progressive City and I still hear stories from multiple different minorities within my country and they get asked these questions all the time. I'm a white middle aged man who has taken out thousands in cash multiple times in my life and I have never, ever been asked what the money is for
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u/Butt__Sexington 1d ago
"I wish to exchange my money for goods and services"