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PREPAID CREDIT CARDS ARE A MAJOR CAUSE OF MONEY LAUNDERING & ARE NOT REGULATED |
Prepaid credit cards can be abused because it is difficult to trace the origins of money loaded to them, the Government of Canada says.
Under the changes, prepaid cards would be treated like bank accounts, meaning issuers would need to verify the card purchaser’s identity, keep records and report any suspicious dealings.
The measures would not apply to gift cards tied to specific retailers or shopping centres.
The planned changes represent an attempt by regulators to keep up with the dawn of new financial technologies to deliver services more conveniently.
“While providing benefits to consumers, the new business models can complicate monitoring as well as make it more difficult for authorities to follow the money trail,” the federal summary says.
The overall goal is to ensure banks, money service businesses and others who provide access to the financial system know their customers and keep good records, the summary adds.
“Such information could assist in the investigation, apprehension and prosecution of money launderers and terrorist financiers.”
The proposals come as the RCMP makes the fight against money laundering “a key strategic priority” for its federal policing branch by “elevating the priority” of the crime, according to an internal memo released under the Access to Information Act.
“While providing benefits to consumers, the new business models can complicate monitoring as well as make it more difficult for authorities to follow the money trail,” the federal summary says.
The overall goal is to ensure banks, money service businesses and others who provide access to the financial system know their customers and keep good records, the summary adds.
“Such information could assist in the investigation, apprehension and prosecution of money launderers and terrorist financiers.”
The proposals come as the RCMP makes the fight against money laundering “a key strategic priority” for its federal policing branch by “elevating the priority” of the crime, according to an internal memo released under the Access to Information Act.
Chronicles of Monte Friesner - Financial Crime Analyst 
Contributed by Andrei Slavenkov - Investigating Consultant
