One of the things that enticed me to write historical crime novels focusing on financial crime was the realisation – when I was doing some research into the history of a particular bank – that the specific tools may change but the mistakes are repeated. Nowadays we are wrestling with the mechanics and implications of virtual currencies; in 1820s London (the setting for my novels) people were struggling to understand and trust new-fangled personalised cheques, and share certificates. But while we snigger at the ignorance of Regency financiers and their clients, it is worth remembering that some financial instruments do hang around. We’re not very cheque-based in the UK any more, but the Americans still love them. And last week AUSTRAC – the Australian FIU – issued a report into the money laundering and terrorist financing vulnerabilities of the traveller’s cheque.
*wibbly, wobbly lines to suggest a fond memory* For younger readers, before we all had credit cards and cashpoint cards that worked abroad, the prudent traveller would carry a bit a cash and the majority of his assets in the form of traveller’s cheques. You would buy these at the bank or post office before you left the safe shores of home, and they came in fixed amounts – you had to sign them as you bought them. Hotels and restaurants abroad would then accept them in place of cash, asking you to sign them and produce your passport to prove you hadn’t pinched them. But you had to pay a commission all along the line: to buy them, to use them and to cash them in – another reason for their decline.
So what do the Aussies think of their vulnerability to money laundering and terrorist financing? To be frank, I’m surprised this report was required: “The purchase of traveller’s cheques is likely to be vulnerable to ML ‘placement’ risk, as customers can buy traveller’s cheques using cash [but] there are now only two financial institutions that sell traveller’s cheques in Australia. [These reduce the risk by]: only selling to known customers; limiting the total value of traveller’s cheques a person can buy in a single day; and adding physical features to traveller’s cheques to reduce the risk of counterfeiting.” And traveller’s cheques really are on their way out: “Sales of traveller’s cheques in Australia have been declining rapidly… with 2016 sales figures representing a 90% decline on sales from 2012.” No self-respecting launderer is going to use a financial instrument that will draw attention because it is so rare; as the report confirms, “while some individuals and businesses may suffer loss due to traveller’s cheque fraud, the criminal misuse of traveller’s cheques is unlikely to have consequences for the Australian economy as a whole, or national and international security”.
Ha ha! This brings back memories…
My first job in the UK (1992) was with Citibank at their Travellers Cheques refund centre (horrible building near Lewisham station), processing claims for travellers who had their TCs lost or stolen and organising refunds. Multilingual staff required as we had to speak to banks all over Europe to authorise the refunds; I had no banking experience whatsoever but spoke 4 languages so that got me the job.
Honest person as I was, it never crossed my mind that someone would report their TCs stolen after having gambled them all away at the local casino to try and recoup their losses… It introduced me to what we then called “corporate security” and the shady world of money laundering (in its infancy at the time), and I have been fighting crime in my own little world ever since.
I love reading your blogs.
Welcome to the blog, Marie, and thank you for your comment and kind words. What fun to hear about your introduction to AML – how we are all sucked in and then find we just cannot let go! Like you, I started out innocent and honest and (this may be just me…) have ended up mistrusting almost everyone when it comes to money! Keep fighting that crime – we need as many as possible on the side of the angels. Best wishes from Susan