Final answer:
When a customer claims to be conducting a transaction on behalf of someone else, it can be a red flag. Businesses should exercise caution and verify the identity and intentions of the customer to prevent fraudulent activities.
Step-by-step explanation:
When a customer tells you that they are conducting a transaction on behalf of someone else, it can potentially be a red flag indicating suspicious activity. This is because it could be a tactic used by scammers to avoid being traced. The customer might be acting as a middleman in a fraudulent transaction or trying to use someone else's identity.
For example, let's say a person approaches a bank and claims that they want to withdraw money or transfer funds on behalf of someone else. The bank should exercise caution in such cases and verify the identity and intentions of the customer.
Financial institutions and businesses often have protocols in place to detect and prevent fraudulent activities. They may require additional documentation or information from the customer in order to proceed with the transaction, ensuring that it is legitimate and not part of a scam.