The laundrette on the high street?

My husband is away for three weeks on a course in the Netherlands, and we had a bit of a dither about how he should take his money.  As it costs a lot to get cash out of a foreign ATM, we thought one big stack of cash would be wise, but then he’s staying in student digs, so that might be a bit risky.  And then he read about Ukash.  In short, you buy a Ukash code, which (according to their website) can be “used to pay at thousands of websites that accept Ukash [and to] load prepaid cards and eWallets”.  It’s not a new concept, the prepaid card, but I’ve always been a little uneasy about them because of the rather minimal due diligence done on applicants.  After all, if you have a fistful of prepaid cards and not very robust checks, you can load them with dirty cash, take them somewhere else – perhaps overseas – and use them to take out a different currency or pay for items as you might with a credit or debit card.  Laundering, in fact – low-level, but still handy.  But perhaps that’s just me, being paranoid, and of course you would expect nothing less of me when it comes to laundering.

And then today he read about a fab new extension to their service.  He can now top up his card with Ukash not just online – via a debit card with a bank, which is how he first loaded the card (and which entails some sort of relationship with a regulated financial institution) – but also on the high street.  A quick check of possible top-up locations within five miles of our home shows that he can go into our local branches of the Co-op, Spar and WH Smith as well as numerous one-off corner shops *faints dead away*.  So what are the checks done in these locations on the fistfuls of cash being handed over?  Well, according to the Ukash T&Cs: “By acquiring a Ukash voucher code, you give your consent that Ukash has the right to perform such CDD (Customer Due Diligence) checks deemed necessary to comply with Anti Money Laundering regulations, or if Ukash, in its sole opinion, suspect fraudulent use and/or misuse of the payment scheme.  You further undertake to co-operate fully to ensure the CDD information required is provided to Ukash within the time parameters to be specified by Ukash.”  Does this mean that they send you away to return with your passport before they sell you a Ukash code?

As I say, it’s fairly low-level stuff – but not inconsequential.  Again, consulting the Ukash T&Cs: “You may obtain, subject to the processes deployed by Ukash to detect and prevent fraud, up to 5 Ukash voucher codes of up to 180GBP each in the United Kingdom (250EUR or the equivalent of 250EUR in another currency outside of the United Kingdom unless otherwise restricted to a lower amount) on any one day.  You may not hold in excess of 900GBP in the United Kingdom (1250EUR or the equivalent of 1250EUR in another currency outside of the United Kingdom unless otherwise restricted to a lower amount) of Ukash voucher codes at any time.”  So you can only pay in £900 per day – but that’s enough to clear the takings of a couple of street dealers.

This entry was posted in Due diligence, Money laundering and tagged , , , , , . Bookmark the permalink.

6 Responses to The laundrette on the high street?

  1. Claire says:

    Sounds complicated. The Maestro card I have with a Belgian bank allows you to draw money for free (unless the local bank charges) – world wide (or wherever Maestro services exist). I also try to pay with my card as much as possible, to avoid having to carry cash around. I am glad the days of travelers’ cheques are over!

  2. Yes, I remember travellers’ cheques – what a hassle they were, yet rather glamorous!
    Best wishes from Susan

  3. DAWN TINDALL says:

    I am reliably informed by the trainer at my previous employer that this is a normal form of currency in Africa and one of the typologies we must be aware of.

  4. Hello Dawn
    Yes, the African financial environment is very interesting. They have leap-frogged several of our developments, for instance there’s not much online banking because computers are rare, but mobile banking is the norm. As ever with typologies, it’s all about context: is the activity or transaction normal for the client and the sector and jurisdiction within which he is operating?
    Best wishes from Susan

  5. Robert Long says:

    I believe that use of prepaid cards in laundeirng was a big problem for the US a few years back, but that we where not really seeing it in the UK at the time. Perhaps in this we’re a bit behind again, but there will be learning and good practice we can borrow from the states.

    Its not suitable for large sums of cash but for day to day living expenses the prepaid card is a godsend to your street level ne’r-do-well.

  6. Yes, the US is certainly ahead of us on this one – prepaid cards (including payroll cards) are much more used and mainstream there than here. Your’re right: the thing to do is check what they have done to guard against criminal abuse of the system. And yes, prepaid cards are not much use for laundering large amounts, but with armies of smurfs it can be done – and for day-to-day expenses, yes, very popular.
    Best wishes from Susan

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s