Thursday, May 8, 2008

The Legal Clean Up in Prepaid

A few months ago, Business Week wrote an article detailing the possible ways prepaid cards have been used for fraud. These cards have been a vital part of the money laundering chain. The beginning of the article details how a high end escort service in Charlotte, North Carolina used the cards to provide paychecks to its workers.

Since the creation of these cards in the 1990s, their uses have expanded. Originally, they were created in order to make it easier for employers to pay their workers. Now, they are used for those people who do not wish to have a debit/credit card, as well as undocumented workers or high schoolers.

But now, the government is creating legislation to cut down on the way these cards can contribute to money laundering and illegal activity. Issuers will soon be held accountable for the money laundering that occurs with the issued cards.

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