Roadblock gift card crack#

cards to cover their expenses, none of these financial footprints would have been available.' It went on to warn that the terrorists could have quietly moved large sums of money into or out of the U.S.: That's from a Treasury Department assessment of financial security threats in 2005. Six years after Treasury identified that vulnerability, concern that drug smugglers and terrorists are exploiting it is driving the federal government to change the rules for issuing and using prepaid cards, particularly high-value reloadable cards like the cash cards you might take with you on vacation.īy making it harder to get prepaid cards without subjecting buyers to government scrutiny, regulators and lawmakers hope to make it easier to detect patterns of money movement that could signal something nefarious. But card issuers and some business experts warn that the expense and paperwork involved in the new restrictions, which require issuers to keep records on who bought how much for five years, could drive smaller card operations out of the market. When the government refers to 'prepaid debit cards,' it's not talking about the standard bank debit card you probably have in your purse or wallet. Because such cards are attached to bank accounts, they're already closely monitored my numerous federal agencies. If you gave a bank debit card to someone to do something bad with, it and you would be easily traceable.

One of the new rules, in fact, is to rename prepaid debit cards, which also used to be known as 'stored-value cards,' to avoid confusion. They're now called 'prepaid access cards' because they're not tied to a bank account. They're just pointers to a sum of money you've already paid up (or been given) in advance. The money itself can be anywhere, including accounts outside the reach of government monitoring. 'The distinction actually makes good sense,' said James Angel, a business professor at the McDonough School of Business at Georgetown University. Prepaid cards, and their fees, go mainstream 'There's a problem with a prepaid card because it can begin with cash - the trail is broken, and you can't track where the money came from.' 'You don't have that much risk of terrorism through a (bank) debit card,' he said in an interview. Jim Schlegel, a senior product manager at ACI Worldwide of New York, which creates and manages electronic payment systems for banks and major retailers, said the new rules are well-intentioned, but he questioned just how big a problem money laundering through prepaid cards really is. It's 'such a small percentage of the overall problem, and attempts to propose very heavy legislation and requirements around it put a drag on an otherwise growing and profitable sector,' he said in an interview. Law enforcement agencies and banking regulators acknowledge that there's no way to know how much money is being moved undetected across U.S.

Roadblock gift card crack#

#ROADBLOCK GIFT CARDS CRACK#īorders through the cards - that's the point of money laundering, after all.īut in a report late last year on money laundering and cross-border currency smuggling, the Government Accountability Office cited the Treasury Department's 2005 assessment to urge action to crack down on misuse of prepaid access cards, saying it was convinced that the shuttling of criminal proceeds across the border, 'whether in the form of bulk cash or stored value' (on prepaid cards), poses 'a significant threat to national security.' (In the U.S., that threshold is $10,000, so if it were based here, the organization might regularly reload a card with $9,900.) In an examination of the threat last year, the Financial Action Task Force, an international agency established by the G-7 in 1989, said such an operation typically works like this:Ī criminal organization repeatedly loads a prepaid card in increments just below the amount that would trigger a report to the government.

The card, or a second card linked to the same account, is sent to an associate, perhaps in another country, who withdraws the funds through ATMs. In one such operation based in Australia, more than $100,000 was laundered this way, the FATF reported.