Credit cards are valuable financial products that help their users travel from digital entertainment to luxury items, from paying bills to food shopping, thereby changing our world to make it easier and more convenient.
As the world transitions to digital payments, seamless and cashless transactions also create a global risk of credit card laundering for financial systems.
Let's explore some details and examples of these techniques in more depth
𝐎𝐯𝐞𝐫𝐜𝐡𝐚𝐫𝐠𝐢𝐧𝐠: The merchant sells the item more than its actual price for making an illicit transaction appear legitimate (to clean the dirty money).
𝐒𝐭𝐨𝐥𝐞𝐧 𝐜𝐫𝐞𝐝𝐢𝐭 𝐜𝐚𝐫𝐝𝐬: Criminals use stolen credit cards through various methods, including hacking, phishing, or skimming.
𝐋𝐚𝐲𝐞𝐫𝐢𝐧𝐠: They create a complex web of financial activity by employing a series of 𝐭𝐫𝐚𝐧𝐬𝐚𝐜𝐭𝐢𝐨𝐧𝐬, 𝐭𝐫𝐚𝐧𝐬𝐟𝐞𝐫𝐬, 𝐚𝐧𝐝 𝐟𝐢𝐧𝐚𝐧𝐜𝐢𝐚𝐥 𝐦𝐚𝐧𝐮𝐯𝐞𝐮𝐫𝐬, which makes it difficult to trace transactions.
𝐅𝐫𝐚𝐮𝐝: Criminals are also using stolen cards or creating fake credit cards to launder money; this includes purchasing 𝐥𝐮𝐱𝐮𝐫𝐲 𝐢𝐭𝐞𝐦𝐬 𝐬𝐮𝐜𝐡 𝐚𝐬 𝐜𝐚𝐫𝐬 , 𝐣𝐞𝐰𝐞𝐥𝐥𝐞𝐫𝐲, 𝐨𝐫 𝐫𝐞𝐚𝐥 𝐞𝐬𝐭𝐚𝐭𝐞, which can then be sold for cash to hide the illicit funds.
𝐎𝐧𝐥𝐢𝐧𝐞 𝐠𝐚𝐦𝐛𝐥𝐢𝐧𝐠 𝐚𝐧𝐝 𝐠𝐚𝐦𝐢𝐧𝐠 𝐬𝐢𝐭𝐞𝐬: Criminals can use stolen credit cards to purchase large amounts of virtual goods or in-game currency within these platforms.
𝐒𝐡𝐞𝐥𝐥 𝐂𝐨𝐦𝐩𝐚𝐧𝐢𝐞𝐬: Criminals can open credit card accounts and make purchases using shell companies. These businesses aren't a legitimate entities.
A real-life example is 𝐉𝐞𝐫𝐞𝐦𝐲 𝐉𝐨𝐡𝐧𝐬𝐨𝐧, 𝐚 𝐭𝐞𝐜𝐡𝐧𝐨𝐥𝐨𝐠𝐲 𝐞𝐧𝐭𝐫𝐞𝐩𝐫𝐞𝐧𝐞𝐮𝐫 𝐟𝐫𝐨𝐦 𝐔𝐭𝐚𝐡, who laundered money by creating various shell companies to continue processing credit card transactions even after facing account closures due to excessive customer chargebacks.
𝐂𝐫𝐞𝐝𝐢𝐭 𝐂𝐚𝐫𝐝 𝐌𝐨𝐧𝐞𝐲 𝐋𝐚𝐮𝐧𝐝𝐞𝐫𝐢𝐧𝐠 𝐖𝐚𝐫𝐧𝐢𝐧𝐠 𝐒𝐢𝐠𝐧
1️⃣ Cash advances, especially large ones
2️⃣ Numerous small purchases
3️⃣ Transactions with high-risk merchants
4️⃣ Suspicious Shipping Address
5️⃣ Inconsistencies in the provided information
In this evolving technological landscape, safeguarding your financial information and credit cards from criminals is paramount.
𝐈𝐟 𝐲𝐨𝐮 𝐮𝐬𝐞 𝐦𝐮𝐥𝐭𝐢𝐩𝐥𝐞 𝐜𝐚𝐫𝐝𝐬:
- Ensure you shop from reputable sources.
- Regularly monitor your account activity.
- Keep track of your credit score for any unexpected changes.
- Strong passwords and multi-factor authentication