Beware of prepaid card fraud!

"The law defines a prepaid card as a certificate, card or other medium of exchange that allows the consumer to acquire goods or services from one or more merchants in exchange for a payment provided in advance."[1]

Since prepaid cards are not considered monetary units and are not regulated by the requirements of the Proceeds of Crime (Money Laundering) and Terrorist Financing Act with regards to reporting, they are attractive to criminals. Individuals linked to terrorist activities take advantage of the lack of regulation to launder money using these cards.

Because prepaid cards are often issued to consumers without any identity verification, there exists no physical trace of the card's buyer. To this date, any individual can purchase any number of cards and load them with any amount[2]. Furthermore, as FINTRAC mentions in its 2008 annual report: "The wide variety of prepaid cards also means fund origins are difficult to trace and it is hard to ascertain whether the money is from a legitimate source."

Prepaid cards present the same characteristics as cash: they are portable, valuable and exchangeable.

B2T supports businesses with their compliance program aimed at fighting against money laundering and terrorist activity financing by providing solutions tailored to the current regulatory environment.

[1] Consumer Protection Act  (bill 60)