FINTRAC Compliance for Factors

New FINTRAC obligations for factoring companies as of July 10, 2025. Comply+ automates your reporting requirements so you can focus on serving your clients.

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New FINTRAC Obligations for Factoring Companies

As of July 10, 2025, factors are reporting entities under the PCMLTFA. If your business purchases accounts receivable at a discount (factoring) or provides invoice financing, you now have FINTRAC reporting and compliance obligations.

Factoring is a well-established financing tool used by businesses across Canada. The inclusion of factors in the PCMLTFA reflects the government's recognition that receivables financing can be used to move or disguise illicit funds. Whether you operate a large factoring operation or a specialized invoice finance business, the new rules apply to you.

What You Must Do

  • Register with FINTRAC as a reporting entity if you have not already done so.
  • File Large Cash Transaction Reports (LCTR) when you receive $10,000 or more in cash. Deadline: 15 calendar days.
  • File Suspicious Transaction Reports (STR) when there are reasonable grounds to suspect money laundering or terrorist financing. No dollar threshold. Deadline: as soon as practicable.
  • Verify client identity using reliable, independent source documents for all clients at or above prescribed thresholds.
  • Maintain records of transactions, client identification, and reports for at least five years.
  • Establish a compliance program with written policies, a compliance officer, a risk assessment, and staff training.

Why Factoring Carries AML Risk

Factoring transactions involve the purchase of trade receivables, often at scale. Several characteristics of the factoring business model create AML vulnerability:

  • Third-party payments: Factoring inherently involves payments from third parties (the debtor paying the receivable). Tracing the original source of funds and the legitimacy of the underlying trade transaction requires due diligence beyond simple KYC.
  • Volume and speed: Factoring operations process large numbers of invoices quickly. Each invoice represents a payment obligation from a different debtor. Monitoring this flow for suspicious patterns at volume requires automation.
  • Fictitious invoices: One of the primary money laundering risks in factoring is the use of fictitious or inflated invoices to generate illegitimate payments. Detecting fake receivables is a core compliance challenge.
  • Cross-border receivables: Factors that purchase international receivables face additional complexity with foreign debtors, cross-border payments, and jurisdictions with varying AML standards.

How Comply+ Helps Factors

Automated Reporting

Upload your transaction data. Comply+ identifies all cash receipts at or above the LCTR threshold, generates pre-filled reports, and submits directly to FINTRAC.

STR Detection for Receivables Finance

Our aiSTR technology flags transaction patterns that match FINTRAC risk indicators relevant to factoring: unusual invoice patterns, debtor payment anomalies, and high-risk client profiles.

Client and Debtor Record Management

Comply+ maintains records of both your clients (the sellers of receivables) and their debtors. This dual-level record-keeping is essential for demonstrating compliance during FINTRAC examinations.

Compliance Infrastructure

For factors that are building a compliance program for the first time, Comply+ provides the reporting, record-keeping, and audit trail infrastructure you need from day one.

Factoring is newly regulated under the PCMLTFA. Getting your compliance program in place early puts you ahead of enforcement and protects your business.

Record Keeping Requirements

FINTRAC publishes official guidance on record keeping for factors. For full details and current requirements, see: Record keeping requirements for factors (FINTRAC).

Enforcement & Penalties

The Cost of Non-Compliance

FINTRAC enforcement is intensifying. Recent penalties demonstrate that compliance failures result in significant financial consequences, with Bill C-2 increasing maximum penalties to $20 million for entities.

Recent FINTRAC Penalties

FINTRAC has imposed significant Administrative Monetary Penalties (AMPs) for compliance failures across multiple sectors.

Juba Express Inc. — $67,150

December 2025 — Toronto, Ontario

Multiple compliance failures including no effective compliance regime, no proper risk assessment, and failures to submit EFT and LCT reports.

Read case study

MP Technology Services Ltd. — $536,853.35

December 2025 — Foreign MSB (Seychelles)

Failed to submit STRs for transactions with exposure to darknet marketplaces, sanctioned entities, and child sexual abuse material.

Read case study

Xeltox Enterprises (Cryptomus) — $176,960,190

October 2025 — British Columbia

2,593 violations including 1,068 unreported STRs, 1,518 unreported LVCTRs, and failure to comply with Ministerial Directive on Iran.

Read case study

KuCoin (Peken Global) — $19,552,000

September 2025 — Foreign MSB (Seychelles)

Unregistered foreign MSB, 2,952 unreported LVCTRs, and 33 unreported STRs linked to darknet marketplaces and illicit chemical trade.

Read case study

Bill C-2: Increased Penalties

Under Bill C-2 (tabled June 2025), maximum Administrative Monetary Penalties would increase dramatically:

  • Entities: Up to $20 million (previously $500,000) — a 40x increase
  • Individuals: Up to $4 million (previously $100,000)
  • Criminal penalties: Certain compliance failures can result in criminal prosecution
Learn more about Bill C-2

Enforcement Trends

  • 23 Notices of Violation issued in 2024–25, the highest annual volume since 2008
  • More than $25 million in total penalties in 2024–25
  • Over 150 penalties imposed since 2008 across all regulated sectors
  • FINTRAC is moving to a supervisory model anchored in credible deterrence

Why Choose Comply+

Purpose-built for Canadian FINTRAC compliance. Automate reporting, reduce risk, and scale your operations.

Comprehensive Reporting

Handle all FINTRAC transaction types with automated LCTR, LVCTR, EFTR, and STR detection and submission. Our system identifies reportable transactions across cash, virtual currency, and electronic funds transfers.

AI-Powered Detection

Our proprietary aiSTR™ technology automatically flags suspicious transactions and drafts FINTRAC-compliant narratives. Reduce false positives and ensure nothing falls through the cracks.

Scalable Operations

Scale your operations without increasing compliance overhead. Automate reporting workflows to handle growth from hundreds to thousands of transactions per month.

Platform Features

Complete FINTRAC Compliance Solution

From batch uploads to direct FINTRAC submission — everything you need in one platform

Direct FINTRAC Submission

Submit reports directly to FINTRAC securely. No need to log in to the FINTRAC website — everything is handled within Comply+.

Autopilot Mode for Connected Databases

For fully connected databases, enable autopilot for automatic submission of LCTRs, LVCTRs, and EFTRs. Our proprietary aiSTR™ technology handles suspicious transaction detection, requiring manual review only for STRs.

Intelligent Batch Processing

For non-connected databases, upload a CSV of transactions. Automatically detect required reports and generate draft LCTRs, LVCTRs, EFTRs, and STRs with AI-powered analysis.

AI-Driven STR Detection

Our proprietary aiSTR™ technology automatically flags high-risk transactions and drafts narratives aligned with FINTRAC risk indicators. You retain full control with manual overrides.

Customer & Location Management

Maintain complete customer and location data with direct integrations to providers like SumSub. Reports auto-populate with existing records.

Draft & Save Reports

Create and save draft reports — including AI-generated STR narratives — for later completion. Work at your own pace with automatic data preservation.

STR Extensions Made Simple

Add STR extensions to existing reports (LCTR/LVCTR/EFTR/CDR) with one click. Fill only additional fields — no separate forms.

COMING SOON

AI Model Configuration

Risk Detection Settings

Risk Indicator A
Identified: 87%
Risk Indicator B
Identified: 94%
Risk Indicator C
Identified: 82%
Overall Risk Rating78%

Recommended STR filing

aiSTR 2.0

Advanced risk flagging via AI. Machine learning flags suspicious transaction patterns — reducing false positives and helping teams act faster on STRs.

Direct Slack integration for no login STR review/submissions

Maximize risk detection with custom set, and AI-driven risk indicators

Set your risk indicator weightings, or let aiSTR optimize detection

Generate higher accuracy through reinforced learning

30-Minute Demo

FINTRAC Compliance for Factors

In 30 minutes, walk through how Comply+ helps you move from transaction data to draft reports, STR review with your team, and FINTRAC API submission without logging into the Web Reporting System (FWR) for each filing.

1. Draft report preparation

Upload a CSV or connect your system and see how Comply+ helps surface reportable activity for LCTR, LVCTR, EFTR, and CDR workflows.

2. STR review path

See how aiSTR™ supports narrative drafts and how your team reviews and decides what is filed.

3. Submit and confirm

Follow submission through FINTRAC's API and where confirmations and status live in Comply+.

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Disclaimer

This page is provided for general informational purposes only and reflects our interpretation and opinions based on publicly available information at the time of writing. It does not constitute legal advice, financial advice, regulatory guidance, or a substitute for professional counsel. Reporting entities and businesses subject to FINTRAC obligations should consult qualified legal and compliance advisors before making decisions relating to FINTRAC, AML obligations, or compliance requirements.