I've run into a situation twice sending funds via Fed wire where the seller appears to be on a money laundering and/or terrorism watch list. I send the wire, and the wire gets held till I answer questions about the seller. The questions requested by the Feds are things like the full name and DOB, the name of the seller's employer, the seller's social security number. The wire is held indefinitely till the questions are answered, and the Feds can ask more questions after you provide answers. If you decline to provide the answers to the questions and cancel the wire, the funds are held till the Feds see fit to release them.. In the first case, the seller was a LA physician, who is a radio/television personality and in the second case, just and ordinary Joe. In the first case, I never let the seller know what was going on and simply replaced the wire with an overnight cashiers check. In the second instance I canceled the wire and let the seller know what was going on. He said that he had had problems with this on international wires, but never a domestic wire before. I replaced the payment with a PayPal gift payment. In both cases, I had the funds to complete the purchase outside of what was being held by the Feds, but I lost the use of the wired money for a week or so.

The question is, what is the right way to handle these situations as a buyer and what is the right way to handle these situations as a seller?

 

what do you mean by "Fed wire"?

are you referring to a standard bank to bank wire transfer?

 

Sounds like you handled it just fine as the buyer.

The seller should simply cooperate and provide the details to the buyer if necessary. I'm not really sure how anyone investigating the transaction expects you to know the requested information (like seller's date of birth) without seller cooperation. The seller would probably like to know what's going on. Did the investigating agency tell you not to communicate the issue with the sellers?

With that said are you certain, you're not the one being scrutinized?

 

Federal reserve wire system.https://en.wikipedia.org/wiki/Fedwire

 

The issue is whether the seller should cooperate or not. The seller doesn't know the buyer from a hole in the ground and vice versa. You put something up for sale and someone agrees to buy it with remittance via Fed wire and then says there is a problem with the wire and starts asking questions like what is your full name, what is your DOB, what is your social security number. If you don't know you are on a watchlist would you provide them the information? Wouldn't you think the buyer was a scammer? What are they going to do with your bank information, DOB, full name and social security number? The issue is, if a buyer starts asking the questions the Feds want answered, could they queer the deal if the seller concludes the buyer is a scammer due to the nature of the questions? The people asking the questions say nothing. They just take the answers and decide whether they have more questions or not. Since I cancelled both wires I have no idea how these resolve. Given the lack of any time frame associated with the process it is pretty clear if you want the transaction, you need to go around the system.

I'm certain that I'm not being scrutinized. I wire money at least a dozen times a year to 3rd parties and have only run into this situation twice in a decade.

 

bizarre...Ive sent hundreds of wire transfers and never had this come up

 

Looked at my records. First happened to me 6 years ago and then again last week.I must be unlucky......

 

Just last July I purchased a pair of watches from a very known dealer/member of this site, very well respected and it was my second transaction with him. For some reason that I am still not clear about, the seller's bank (JP Morgan) held the funds for I think 4 business days. It was definitely stressful. My bank confirmed funds were sent, JP Morgan confirmed the funds were received, but again held without any satisfactory explanation as to why. They did mention that it might have had to do with the message I wrote on the memo line of the wire, which was simply a clear description of the two pieces the wire funds were being used to purchase. Eventually the funds cleared and the items were shipped immediately. Seller was very helpful through the entire process.

 

Banks are subject to many regulations around controlling money laundering, terrorism funding, etc. Transfers can trigger "know your customer" rules which require them to collect info. I also suggest being careful about what you put in memos on wires or PayPal; saying the wrong thing can result in confusion, bureaucracy, approvals, and delay. I'm aware of situations where payments have been held up because of coincidental alignment between the terms in the memo and terrorism-related terms like "ISIS", even if entirely innocent. The ways that bank compliance departments handle these things can be long on process and short on judgement. I advise saying nothing of interest in the memo.

 

Yep, lesson learned there. But honestly, if I was going to launder money for terrorist activities, would I really put ISIS on the memo line? That might make me the worst terrorist ever.

 

Did I mention how process trumps reasoning?