1. Western Union Confidential ©2009 Western Union Holdings, Inc. All Rights Reserved. FAC003 Suspicious Activity

2. Western Union Confidential ©2009 Western Union Holdings, Inc. All Rights Reserved. 2 Suspicious Activity As you interact with consumers, be aware of unusual behaviour that may indicate some form of suspicious activity. Sometimes a consumer will demonstrate certain characteristics that indicate that a transaction may be potentially suspicious. The following behaviours may indicate that the transaction is suspicious:  The consumer is nervous, rushed, or aggressive;  The consumer is reluctant to show you identification or the identification may seem unusual, false, or altered;  The consumer offers you money or gifts if you will allow them to avoid certain record keeping requirements or if you will handle the transaction in a certain way;  The consumer threatens you or an employee in an attempt to deter record keeping or reporting duties.

3. Western Union Confidential ©2009 Western Union Holdings, Inc. All Rights Reserved. 3 Red Flags There are a number of possible factors, which signal that an activity or transaction might be suspicious. These factors are commonly referred to as “red flags” or “warning signs.” Observing a “red flag” should trigger some questions and cause you to consider the transactions more carefully. Examples include:  A consumer uses false ID or provides different identification or information each time he or she conducts a transaction. Differences may include:  Different name or different spelling of name  Different address or different spelling or numeration in address  Different types of identification  A consumer engages in transactions that appear unusual given his or her normal pattern of activity or business.  A consumer alters a transaction upon learning that he or she must show ID, in an apparent attempt to avoid record keeping thresholds.  A consumer suddenly alters his normal pattern of activity and begins sending large or more frequent money transfers.  Two or more consumers working together break one transaction into two or more transactions, apparently in order to evade reporting or record keeping requirements.  A consumer uses two or more cashiers in the same day in order to break one transaction into smaller transactions and evade reporting or record keeping requirements.

4. Western Union Confidential ©2009 Western Union Holdings, Inc. All Rights Reserved. 4 Evaluating Suspicious Activity You may notice signs of suspicious behaviour. During the interaction, ask yourself if the transaction seems to make sense. As you engage the consumer during the transaction, consider these questions:  What is the Sender’s occupation?  What identification has the Sender provided? Does it match the story provided?  Is the consumer engaged in a business that is less likely to use Western Union® services as opposed to a bank?  Does there appear to be a legitimate personal or business purpose or other reason for the transaction?  Are related transactions occurring?  Do the amounts or frequency of the transactions make sense for the particular consumer and the stated reason for the transaction? A consumer sends or receives large and/or frequent Western Union remittances that do not fit the known profile of the consumer and what you know of his activities. Examples include a student, unemployed person, or low-wage earner transferring or receiving large sums of money.  Does it make sense for the money to be going to or from a particular location?  Is there a question about the source of the funds?  Is the consumer exhibiting any unusual behaviour?

5. Western Union Confidential ©2009 Western Union Holdings, Inc. All Rights Reserved. 5 Examples of Suspicious Activity Transactions That Do Not Make Economic Sense  Transactions which are incompatible with your knowledge and experience of the consumer.  Frequent transactions such that each transaction amount by itself need not be significant but the total of all the transactions is significant. Transactions Involving Large Amounts of Cash  Large and regular payments that cannot be identified as bona fide transactions, to countries associated with the production, processing or marketing of narcotics or other illegal drugs.  Cash payments remitted to the same beneficiary by a large number of different persons without an adequate explanation. Consumers Avoiding Thresholds  Sometimes consumers may attempt to structure transactions so they fall beneath record keeping or reporting requirements. These consumers may “break up” or “split” transactions to keep them from being reported.

6. Western Union Confidential ©2009 Western Union Holdings, Inc. All Rights Reserved. 6 What is Structuring? Structuring occurs when a consumer designs or conducts a transaction to evade triggering a reporting or record keeping requirement. Often, structuring involves a consumer breaking a large transaction into two or more smaller transactions or a large transaction being broken into two or more smaller transactions and conducted by two or more people or the same person at different times. Remember, it is a violation of law and of Western Union policies to split a transaction into smaller amounts, or otherwise structure it in such a way as to avoid a restriction or a reporting requirement. A common type of suspicious activity involves structuring.

7. Western Union Confidential ©2009 Western Union Holdings, Inc. All Rights Reserved. 7 Examples of Structuring A consumer wants to transfer a large amount of cash to one person. He attempts to do so by going to an Agent’s location at different times of the day and sending separate money transfers in smaller amounts to the same person to avoid having a report filed on the transaction. A consumer wants to avoid having a report filed on his transaction. He initially wants to transfer a large amount of cash, but when he learns that you will have to file a report of the transaction, he reduces the transaction to a non-reportable amount. A consumer goes into a small Agent location during one day at three different times and buys a money order from different employees in amounts below record keeping thresholds in an attempt to avoid record keeping requirements. A consumer wants to send a large money transfer. She sends a smaller money transfer amount to the receiver and asks two friends to each send small amounts to the same receiver to avoid record keeping requirements.

8. Western Union Confidential ©2009 Western Union Holdings, Inc. All Rights Reserved. 8 Examples of Suspicious Activities A consumer wants to discuss your record keeping or reporting duties Unusual or suspicious identification documents are provided A consumer claims to be a law enforcement agent conducting an undercover operation when there is no valid identification to support that claim An individual with a known criminal background conducts a substantial number of transactions A consumer receives small incoming transfers and then makes a large outgoing transfer Large-principal transfers are paid with small bills Counterfeit bills, musty bills or extremely dirty bills are used as payment for a money transfer Large sums of cash are presented wrapped in currency straps, with different bank stamps on them Money transfer activity to/from a financial secrecy haven, or high-risk geographic location without an apparent business reason, or when it is inconsistent with the consumer’s business or history Large or multiple incoming money transfers on behalf of a foreign client with little or no explicit reason

9. Western Union Confidential ©2009 Western Union Holdings, Inc. All Rights Reserved. 9 Suspicious or Unusual Transactions for Receivers There are additional unusual factors that may indicate that a receive transaction is suspicious:  Consumers who are reluctant to provide information needed for a reporting or record keeping requirement, whether required by law or by company policy  Consumers who present different identification each time they receive a transaction  Consumers who spell their name differently or use a different name each time they receive a money transfer  Any individual or group that bribes or attempts to bribe an employee not to file any required reporting forms  An individual who is unwilling to provide identification or information when receiving a transaction  Consumers without a local address, who appear to reside locally because they regularly use a Western Union location

10. Western Union Confidential ©2009 Western Union Holdings, Inc. All Rights Reserved. 10 Suspicious or Unusual Transactions for Receivers continued…  A business consumer who receives money transfers from persons in other countries when the nature of the business would not normally involve international transfers  Consumers who receive a number of small money transfers on the same day, or within several days, and then initiates one or more send money transfers to a person in another city or country in about the same amount  Consumers who receive frequent or large volumes or money transfers from persons located in foreign countries  Consumers who receive money transfers and immediately purchase monetary instruments prepared for payment to a third party  Consumers receiving remittances using anonymous of fictitious names

11. Western Union Confidential ©2009 Western Union Holdings, Inc. All Rights Reserved. 11 Reporting Suspicious Activity What to do if you feel a transaction might be suspicious:  Ask additional questions.  Be courteous, but insist on getting all the information you need.  Seek help from more experienced associates, or your line manager if you are unsure about a transaction. What specific procedures to follow when reporting suspicious activity.  Follow the suspicious transaction reporting procedure in your country.  One common report is known as a Suspicious Transaction Report (STR). Such a report must be filed if you know, suspect, or have reason to suspect a transaction or pattern of transactions involves certain types of suspicious activity.

12. Western Union Confidential ©2009 Western Union Holdings, Inc. All Rights Reserved. 12 What information do you collect?  Make sure you understand what information must be collected and report a transaction that you feel is suspicious to your compliance officer. The compliance officer for your Agent location can give directions for collecting and filing the correct information. In most regions of the world, Suspicious Transaction Reports must be retained by the Agent for a specified number of years. What must be kept confidential.  Information related to transactions reported as suspicious must be kept confidential. You should not let consumers know that you are considering filing a STR, intend to file one, or have filed one. Where can I obtain suspicious activity reports?  In most cases, the suspicious activity and the reports can only be supplied to official governmental law-enforcement agencies requesting them. Reporting Suspicious Activity