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To Scan Prepaid Cards, Investigators Cite String of Recent Rulings
By Colby Adams
printPrompted by signs that criminals are increasingly exploiting prepaid cards, federal and state investigators are turning to a handful of recent legal decisions to justify reading the value held on the instruments, sources say. The strategy, driven in part by frustration over federal delays in granting an expected regulatory authority to monitor the international transport of prepaid products, relies on federal court rulings on whether the Fourth Amendment prohibits law enforcement officials from scanning and freezing funds on cards seized from suspects. "We're seeing more and more of these cards in the hands of the wrong people, sometimes stacks of...
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Law enforcement officials in most U.S. states have quietly deployed controversial handheld scanners as part of an effort to interdict suspicious funds held on prepaid cards and other magnetic-stripe products.
An apparent decision by White House officials to postpone the issuance of final rules governing the cross-border transport of prepaid access products has once again drawn criticism from U.S. lawmakers.
As U.S. officials work to shield American prepaid cards from abuse by financial crooks, foreign-issued stored value products remain a relatively easy avenue to move money into the United States anonymously.
Government often moves slowly and (hopefully) deliberatively, but one might wonder whatever happened to those pre-paid card readers being tested along U.S. borders.
American officials will begin field-testing prepaid card readers at U.S. border stops next month as part of the lead-up to the Treasury Department regulations governing their cross-border transport, say officials.
Disputes and confusion over which companies will be responsible for anti-money laundering rules on stored value products has delayed federal registration and oversight of the sector, say industry representatives.
Displeased with proposed regulations, federal and state law enforcement officials are asking lawmakers and the U.S. Treasury Department to strengthen controls on the cross-border movement of prepaid access products.
Restricting transfers between unrelated individuals and requiring IDs to load value are among over a dozen ways financial institutions can limit compliance risks with prepaid access products, an association of banks said Friday.
The U.S. Treasury Department Tuesday prescribed new compliance rules on the prepaid product industry, a sector largely unregulated despite concerns about its vulnerability to money launderers.
A dearth of U.S. Treasury Department regulations governing the cross-border transportation of prepaid access products has hamstrung American efforts to combat Mexican drug-trafficking organizations, according to lawmakers.
Senators chastised the U.S. Treasury Department Wednesday for delays in regulating prepaid access products that can be used to smuggle drug proceeds from the United States into Mexico.
The U.S. Treasury Department's proposals to better regulate prepaid access products fail to outline how the new rules will be implemented and enforced, according to a governmental watchdog group.
Several banks are asking the U.S. Treasury Department's financial crimes bureau for the unthinkable: more anti-money laundering compliance responsibilities.