For the first time in a decade, the total number of SARs filings from financial institutions declined in 2024, down from a record number of filings in 2023 — but not by much
A preliminary analysis of federal banking data suggests US financial institutions filed slightly fewer Suspicious Activity Reports (SARs) in 2024 than they did in 2023 — which, if true, would be the first such decline in the number of SARs filed since the government began collecting SARs data in 2014.
The federal government’s Financial Crimes Enforcement Network (FinCEN) — the agency responsible for collecting and disseminating transaction data from financial institutions under the Bank Secrecy Act — recently released data for the total number of SARs filed in 2024.
SARs are the documents that financial institutions must file with FinCEN whenever behavior by employees or customers is detected that may be associated with criminal activity or is otherwise deemed suspicious, a standard that can differ depending on the institution. Most SARs are filed by depository institutions (banks, savings & loan associations, credit unions) and money services (businesses that transmit or convert money, such as PayPal and Venmo). The rest are filed by loan or finance companies, casinos, insurance companies, and securities/futures firms.
Counting SARs is tricky
In 2023, a record 4.6 million SARs were filed, and historically the total number of SARs filings has been rising at a rate of about 3% to 5% per year. However, FinCEN’s year-end statistics for 2024 suggest that this trend may not continue, and that the total number of SARs filings for 2024 will be slightly fewer than for 2023, which was the highest year ever for SARs filings.
Calculating the final SARs numbers for 2024 is a bit tricky, however, because FinCEN isn’t expected to release its official final analysis of 2024 SARs data until April or May, and the numbers may look a bit different by then. Indeed, FinCEN’s records indicate that a total of 3,801,691 SARs were filed in 2024, somewhat fewer than the 3,809,823 recorded in 2023 — but nowhere near the official 2023 number of 4.6 million.
So why the discrepancy?
According to Jim Richards, president of RegTech Consulting and former Global Head of Financial Crimes Risk Management at Wells Fargo, the catch is that the lower numbers only reflect original SARs, not SARs that are categorized as amended or corrected, or those that report continuing activity from a previously filed SAR.
“FinCEN only counts SARs by their original filing number, so there is an estimated 20% to 22% more amended, corrected, or continuing activity SARs,” Richards says, adding that all of these will be added to the final count.
When all these filings are added in, the total number of SARs for 2024 should land somewhere in the 4.5 million to 4.6 million range, roughly the same as 2023. Current numbers show about 8,000 fewer SARs filings for 2024, however, so the final tally may be a bit lower, but not by much.
Top reasons for SARs filings
Nevertheless, there some interesting nuggets of information to be gleaned from the 2024 SARs data, including that the top four reasons financial institutions gave for filing a SAR in 2024 were i) suspicion concerning the source of funds; ii) transactions without a lawful purpose; iii) check fraud; and iv) suspicious EFT or wire transfers.
Of course, there were other frequently mentioned reasons that banks filed SARs in 2024, including such factors as credit card or debit card fraud, identity theft, Automated Clearing House (ACH) fraud, account takeovers, elder exploitation, and forgeries.
And regardless of what the official SARs stats for 2024 reveal, there are many reasons for the consistent rise in SARs reporting, including such notable factors as:
Check fraud
Over the past few years, the number of check-fraud SARs that have been filed has skyrocketed, due primarily to an alarming rise in national and international crime rings that steal mail — and any checks contained therein — from postal carriers and mailboxes. Then, the fraudsters alter the payee on the checks and deposit them in a different account.
In 2024, there were 682,276 check-fraud SARs filed, up from 665,505 in 2023, and very close to the record number of 683,000 check-fraud SARs filed in 2022. By contrast, there were only 350,000 check-fraud SARs recorded in 2021, which may mean that 650,000 or more check-fraud SARs — almost 2,000 per day — appears to be the new normal.
Elder exploitation
FinCEN also has issued advisories related to elder financial exploitation, another form of fraud that has risen dramatically in the past few years. In 2023, 160,394 SARs were filed that were related to elder financial exploitation, but preliminary FinCEN data suggests that the final number for 2024 could be more than 200,000. There were only 72,173 elder exploitation-related SARs filed in 2021, which means that reported instances of elder financial exploitation have almost tripled over the past four years.
Elder financial exploitation is much more pervasive than these stats suggest, however, because most of these types of crimes go unreported.
Digital crime
Trends such as the increase in SARs for identity theft, account takeovers, synthetic identity fraud, ACH fraud, and electronic fund transfer fraud are all directly related to the growth in online banking and commerce. In fact, cash has dropped to 31% of reported instruments for suspicious financial activity, falling from 40%, says RegTech’s Richards. Meanwhile, wire transfers as a portion of reported instruments for suspicious financial activity, have gone up to 35% from 24%.
It should be noted however that SARs only report suspicions of fraudulent activity, not actual fraud itself, and of the many millions of SARs reported each year, only a few thousand ever result in direct legal action.
Information sharing and defensive filing
Another source for the continual rise in SARs reporting comes from a steady increase in information sharing among financial institutions, the federal government, and international governments. Sharing information about suspicious financial activity spreads awareness and alerts financial institutions to situations that they might otherwise overlook, resulting in more SARs filings overall.
Yet another generator of SARs reports is so-called defensive filing, a better-safe-than-sorry tactic that financial institutions use to avoid being accused of overlooking a potentially problematic situation. Richards notes that every financial institution sanctioned for SAR filings was sanctioned for failing to file SARs or filing late SARs. In fact, Richards says he has never heard of a financial institution being sanctioned for filing too many SARs.
Looking ahead to 2025 and beyond
Given the consistently high incidence of fraud over the past few years, there is no reason to expect that 2025 will be much different. FinCEN tracks more than 90 types of financial malfeasance, from Ponzi schemes to human trafficking, so opportunities for wrongdoing abound.
A steady stream of data breaches also ensures that sensitive personal information will continue to make its way into criminal hands, and there is no shortage of people eager to exploit cracks in the system and the limitations of law enforcement.
You can find out more about SARs and how financial institutions handle threats of fraud here
