FATF warns of misuse of prepaid cards

The Financial Action Task Force (FATF), an international body against money laundering and terror financing, recently studied 33 cases of money laundering and warned about the emergence of prepaid cards and coupons as new ways of cross border money washing.

One of the 33 cases FATF studied involved illegal transfer of Rs64 lakh to India. According to a FATF report on ‘money laundering using new payment methods’, Australian law enforcement officers detained an agent and recovered from his possession AUD1,40,000 (Rs64 lakh) and 46 prepaid cards.

“He also possessed numerous false identity documents and foreign passports,” the report said. Australian authorities found more prepaid cards and gift cards during a search at a storage unit rented in the agent’s name.

The marking on some of the cards, valued at Rs22,000, indicated that they were purchased online, the report said, adding that the agent had 12 driver’s licences, all, except one, under fictitious identities.

The FATF report also featured cases of cross-border movement of closed loop payment cards and a few cases involving open-loop prepaid cards.

According to FATF’s analysis, the amounts laundered varied considerably. While some cases involved a few hundred US dollars, more than four cases involved amounts exceeding $1 million, the highest being $5.3 million.