The Market Monitor Minding the Nation's Business
By Jerry Maglunog
The Anti-Money Laundering Council (AMLC) is looking into reports that credit cards are now being used to launder dirty money.
Money laundering is channeling funds obtained from illicit activities like prostitution, gambling, drug trade or human smuggling into the financial system.
Anti-money laundering bodies monitor the excessive loading of cash in credit cards as a red flag or “alarm” on possible efforts to launder dirty money.
It is difficult to launder money in banks because of their “know-your-client” (KYC) policy; this is especially true of big unibanks that are not looking for depositors. The difficulty in keeping money obtained from illegal activities has apparently prompted those engaged in money laundering to resort to credit cards to enable to do it with banks.
A banker, who requested anonymity, said the growing number of people maintaining three or more credit cards should raise a red flag on money laundering. Currently, there are 15 banks issuing credit cards accredited to the Credit Card Association of the Philippines (CCAP).
“There is no limit how many credit cards a person can have,” the source said. The very first red flag on money launderers is their overpayment, or when they pay half or more than half of their card’s credit limit. “A few thousands or hundreds is no problem to them,” said the source.
An anti-laundering agency, DecTech has already opened an office in Manila to help financial authorities, particularly the AMLC, track down those believed now using credit cards in their money-laundering activities. The source sought to stress that the establishment of the anti-money laundering agency here did not mean the Philippines was a hotbed for money laundering.
But prior to the opening of DecTech’s office in Manila, the country has already been tagged as hotbed for money laundering by the Paris-based Financial Action Task Force (FATF). DecTech is an Australian firm tasked to assist multinationals, especially foreign banks, in tracing money laundering via high-tech software. Established in 2001 and based in Melbourne, Australia, DecTech has become a leading provider of anti-fraud, anti-money laundering and decision-management services to organizations of all sizes in more than 40 countries.
It currently has offices in Australia, Malaysia, Korea, China, Indonesia, the Philippines, Singapore, and Spain. In April 2014, GBG DecTech was acquired by GBGroup PLC (GBG), which specializes in identity intelligence software and services