AML Red Flags Quiz: Advanced Level
This AML red flags quiz is the advanced half of the AML pair. It is written for compliance analysts, MLROs and operations leads at payments companies, money transfer operators and banks — people who clear alerts and decide what to escalate.
Pick an answer for each question. A correct answer shows why it is right; a wrong one is marked incorrect and you can try again. Your score counts first attempts only.
How Well Do You Understand AML Risk, Controls, and Red Flags?
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Question 1. A customer sends five transfers of US$9,800 on the same day to different recipients after asking whether transactions above US$10,000 are reviewed. What is the strongest AML concern?
Question 2. A business customer claims to sell office supplies but sends frequent payments to crypto exchanges, gaming companies, and unrelated individuals overseas. What is the best AML response?
Question 3. Which situation most strongly indicates possible mule account activity?
Question 4. A sanctions screening alert is a close name match to a listed person, but the date of birth, nationality, and address do not match. What should happen next?
Question 5. What is the main AML risk in a nested relationship?
Question 6. A customer provides a clean ID document, but their activity is inconsistent with income, occupation, geography, and expected volume. What is the best conclusion?
Question 7. Which factor would most likely push a customer from standard due diligence into enhanced due diligence?
Question 8. A compliance analyst notices a customer repeatedly receives funds and sends them onward within minutes, keeping only a small percentage. What does this pattern most likely suggest?
Question 9. Why is beneficial ownership review important for shell or holding companies?
Question 10. A customer refuses to explain source of funds for a high-value transaction and threatens to complain unless the transaction is processed immediately. What is the best AML action?
Question 11. Which statement best describes the difference between sanctions risk and AML risk?
Question 12. What is a key danger of relying only on transaction thresholds for AML monitoring?
Question 13. A correspondent bank asks for details about your customer's underlying transaction. Why might this happen?
Question 14. Which is the best example of a risk-based AML control?
Question 15. An analyst believes activity is suspicious but cannot prove a crime occurred. What is usually the correct AML principle?
What the AML red flags quiz covers
Structuring below a threshold, and why thresholds alone are not monitoring
Mule accounts, pass-through activity and layering
Clearing a sanctions alert, and how sanctions risk differs from AML risk
Nested relationships, beneficial ownership and what a correspondent bank may ask
When enhanced due diligence applies, and the risk-based approach
Escalating on reasonable suspicion without tipping off the customer
How to read your score
Your score is the number of questions you answered correctly on the first try, out of 15.
14 or 15: You know this material well. Try a harder quiz in the series, or the FX arithmetic one.
9 to 13: A solid working knowledge with a gap or two. Re-read the explanations for the questions you missed.
5 to 8: The basics are there. The explanations are written to fill exactly these gaps, so take the quiz again tomorrow.
0 to 4: Start with the entry-level quiz and the glossary, then come back to this one.
For the primary source behind several of these questions, see FinCEN advisories, which publish red flag indicators by typology.
More quizzes and further reading
Ten more quizzes in the series, from entry level to FX arithmetic:
Further reading on this site: