After weeks of searching, you finally found a way to score a prepaid, reloadable Visa or MasterCard. Maybe it’s a Swiss TravelCash card, maybe it’s an FBME world card, maybe it’s one of those Polish card with an IBAN. Perhaps you found one that complies with basic international KYC regulations, or maybe you settled for some guy on a forum whom you paid in BitCoins. It might even have been a .onion website. Whatever it is, you got one now. No one will ever find you out. You beat the game. Top of the line.
Not so fast, Timmy. Let me tell you about some of the risks of using these cards.
Over the last couple of weeks and months, I have had the opportunity to attend conferences and events where I have spoken to representatives from FIUs, tax authorities, and financial crime authorities from all over the world. One subject of discussion has been money laundering through anonymous payments instruments, an example of which is that no-name prepaid offshore card you have in your wallet.
Everyone I spoke to is aware of the problem with money laundering through these types of cards. While most are merely at an information-gathering stage right now, they are expecting to take a aggressive actions in 2014 and 2015.
You’re Not A Tourist
Tourists might use prepaid cards with no name. These types of card are fairly common in some countries, where they are marketed as a safe and cheaper alternative to using regular debit and credit cards abroad.
Tourists, however, don’t stick around for more than a few weeks. The same anonymous prepaid card being used over and over is reason for suspicion.
You’re A Creature of Habit
One way users of prepaid cards are caught is because they follow a pattern and form a habit. By using the same card in the same area, you become easy to track. Even if you travel a bit to get to a more faraway ATM, you are still going to be in more or less the same area.
Big Brother is Watching
All ATMs have cameras and most of them are in use. Thinking about wearing a Guy Fawkes mask to your local ATM? You will look extremely suspicious before you even reach the ATM.
In winter you might get away with covering your face in a hat and scarf; if you live in a cold climate.
Putting The Pieces Together
If we combine suspicious use of a prepaid card over a long period of time in the same area and ATM footage, you suddenly become quite easy to catch. An increasing amount of the data gathering can be automated, especially with facial recognition software.
What is the Real Risk?
If you are using your prepaid card, which is probably more expensive than a regular debit or credit card, for such low amounts that you do not think you will be of any interest to any authorities, the risks attached to using a regular card are likely not considerably higher.
It is also worth noting that most FIUs, tax authorities, and similar competent authorities already have several years’ worth of backlog, making small fish unlikely targets.
Although, as always, you will live a more peaceful life if you ensure that whatever you’re doing is legal and compliant with tax codes.
This post is not meant to state that anonymous cards are insecure and useless. They are, however, not as good as many sellers try to hype them up to be.