While the past few years have been treacherous for the credit card industry, there is one area of the business that has grown dramatically: prepaid debit cards. Consumers have increasingly turned to prepaid debit cards as an easy way to have access to their cash without having to worry about keeping cash on hand. From parents using it to distribute allowance to their kids, to consumers simply trying to stick to a budget, prepaid debit cards have been a big hit.
But while this may be a bright spot in a dark period for the credit industry, the federal government is taking no pleasure in the success of prepaid cards. That’s because, according to a report by mainstreet.com, prepaid debit cards are being abused by criminals as an easy medium to funnel and launder money through. And this isn’t just low level crime we’re talking about, apparently it can be used to assist terrorists in securing funds from abroad. This is because customs require those entering the country to declare any amounts of money over $10,000 that they plan to bring in. With prepaid debit cards, criminals can now avoid detection by wiring just under that amount to the cards in multiple installments. This is all made possible by the fact that no identification is necessary to open up one of these cards. Thus, we may very well see some extra security measures implemented on prepaid debit cards in the future. This probably won’t cause any concern to the average American consumer, but to you terrorists out there: we’re onto you!
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