CreditCard Company won't cancel my card and refund me due to Money Laundering rules.

blitzboy

jojo57 wrote: »

I work for a credit card company,so I know that you can close a credit card with either a credit or debit balance,you will just continue to get statements until the balance is refunded or paid.I also know that you should not put your credit card into credit,that is not what the are designed for,they are not accounts that you pay money into unless you own money.If you do put your account into credit on purpose or if its an error(which happens quite a lot) it will ONLY be returned to source. When you do get it returned to source it will be up to that particular company if they are goin to refund the transfer fee.:)

You're wrong. This might be your company's policy but it does not apply to all. I was actually advised to do this by a card company recently, and did. I asked them if they had any super balance transfer offers and they said no but I can do this.

The card that i put into credit then sent out a cheque for the credit balance.

I think that the reason this didn't work for the OP is that the amount was so high. Mine was for £1700 (or something like that) and caused no problem whatsoever.

sfax

rtho782 wrote: »

I completely understand what you are trying here - makes sense, 0% loan etc.

However as someone that works for a Bank I can completely understand why this would ring AML bells, although they have already breached AML regs by telling you that it is due to AML!

How could it be money laundering?

Person A applies for card with no intention to repay, transferrs balance to either another card in their name, or one in Person B's name, gets the cash and vanishes.

Person A could actually be Person Z committing ID fraud against Person A.

Person A could actually have intended to clear off a debt on their own card, but accidentally typed in Person C's card number as they are similar. Person C (that's you!) trys to abscond with the money.

Those are just a couple of risks to the bank off the top of my head. By taking the card into such a large credit balance you have breached your agreement with them and they can basically tell you to !!!!!! off now I'm afraid!!

They don't say it's due to AML, they say it's due to the rules that form part of the AML legislation. It's not the same as tipping off an individual that they are being investigated for AML.

Also, the examples given are both fraud not laundering money. Laundering money is about hiding the source of money. E.g. sell drugs and then slowly pay the cash into a series of bank accounts for legitimate companies and then use it to buy goods further down the line.

A big part of AML is depositing large amounts of cash or withdrawing large amounts of cash and it's the issuing of a cheque in this case that probably contravenes the internal rules that they have in place

sfax

blitzboy wrote: »

You're wrong. This might be your company's policy but it does not apply to all. I was actually advised to do this by a card company recently, and did. I asked them if they had any super balance transfer offers and they said no but I can do this.

The card that i put into credit then sent out a cheque for the credit balance.

I think that the reason this didn't work for the OP is that the amount was so high. Mine was for £1700 (or something like that) and caused no problem whatsoever.

I've also done this recently I got a cheque for about £2,000 on closing

chanz4

if he has a 9K limit, isnt the max transfer 90% ?

jojo57_2

You're wrong. This might be your company's policy but it does not apply to all. I was actually advised to do this by a card company recently, and did. I asked them if they had any super balance transfer offers and they said no but I can do this.

Well after 8 years working with credit cards and dealing with different companies I have never heard of a bank who would advise you to do this,its dysfunctional.
I also dont understand if you were asking your provider for a super balance transfer deal which they didnt have why they would advise you to do this instead,its completely different from a balance transfer??

AdamJK_2

chattychappy wrote: »

A UK bank receiving funds from another UK bank is unlikely to be concerned as to money laundering - particularly if it's clear that the funds are financed by an advance on a CC account. From an AML point of view, accepting funds to put a CC into credit is no more of a risk than accepting funds to pay off a balance.

It's actually quite a common thing to happen with fraudulent funds. Mr Fraudster gains access to credit card(s), makes a balance transfer to another card - this gives the illusion of funds being transferred from a legitimate source.

The funds are then transferred to a current account and are then distributed to several other compromised accounts and are spent rapidly on tangible goods with resale value - phones, top-ups, computer equipment etc. Check the banking boards, I've seen several threads posted along similar lines in the past, plus I've dealt with this type of fraud on many occasions.

Personally I'd be only be criticising BoS had they agreed to the transfer to the current account. Their offer of returning to source is fair and prudent. As for the other banks that have made this type of transfer in the past, then I can't help but feel they are taking a big risk as potentially they would have to pick up the bill on fraudulent transactions.

chattychappy

AdamJK wrote: »

It's actually quite a common thing to happen with fraudulent funds.

Yep, agree entirely with your post. But I would distinguish this kind of fraudulent activity from money laundering in the traditional sense. (Though the later stages of your example begin to look like ML if the object is to end up with legitimate-looking funds.)

sfax

AdamJK wrote: »

It's actually quite a common thing to happen with fraudulent funds. Mr Fraudster gains access to credit card(s), makes a balance transfer to another card - this gives the illusion of funds being transferred from a legitimate source.

The funds are then transferred to a current account and are then distributed to several other compromised accounts and are spent rapidly on tangible goods with resale value - phones, top-ups, computer equipment etc. Check the banking boards, I've seen several threads posted along similar lines in the past, plus I've dealt with this type of fraud on many occasions.

Personally I'd be only be criticising BoS had they agreed to the transfer to the current account. Their offer of returning to source is fair and prudent. As for the other banks that have made this type of transfer in the past, then I can't help but feel they are taking a big risk as potentially they would have to pick up the bill on fraudulent transactions.

Not sure I follow the logic here. The fraudsters manage to get the money in a current account and then decide to move it to other current accounts and then buy things with it? Why would they do that if they already had the CC money in a current account? You can just take cash from a current account and take 100% of it rather than 25% of proceeds from selling stolen goods.

And should BoS and other banks be criticised for issuing credit card cheques or allowing you to take ATM cash on your credit card? This is surely the same thing. You get cash. You owe them money

blitzboy

jojo57 wrote: »

Well after 8 years working with credit cards and dealing with different companies I have never heard of a bank who would advise you to do this,its dysfunctional.
I also dont understand if you were asking your provider for a super balance transfer deal which they didnt have why they would advise you to do this instead,its completely different from a balance transfer??

Well they did. And it worked.

It's not really different, the end result is the same. I get money from the card to my bank account for a small BT fee and have a 0% period before I have to pay it back (apart from minium payments). Aside from taking a couple of weeks longer than a SBT (cheques being posted/clearing etc) I can't see how it is different at all.

AdamJK_2

sfax wrote: »

Not sure I follow the logic here. The fraudsters manage to get the money in a current account and then decide to move it to other current accounts and then buy things with it? Why would they do that if they already had the CC money in a current account? You can just take cash from a current account and take 100% of it rather than 25% of proceeds from selling stolen goods.

If you attempted to withdraw that level of cash from a branch then questions would need to be asked by law. Too much of a risk. Spending the money hard and fast on the single card would trigger anti-fraud systems very sharpish - particularly given the nature of the purchases and if the credit card hasn't been used much in the past.

By calling the bank to make a transfer to a current account that is a single one-off risk. If the bank agree then you can distribute the funds around to maximise what you can withdraw via ATM and buy up without triggering anti-fraud systems. Single withdrawal limit on one card maybe £300 - spread the money around a few accounts (some compromised, some via mules) and that totals up to a lot more hard cash to withdrawn daily until the bank catches on and starts to pick apart the chain.

The idea is not to get the money out of the bank, it's to get as much money out of the banking system before they cotton on while staying under the radar.

As for 25% return, you're looking a lot higher return of around 70% realistically for them. That said would you turn down 25% of £9k for a days 'work'?

Sorry for this all being a tad off topic, but just playing devils advocate, I can see the legitimate reasons behind BoS not agreeing to transfer to a current account. While the OP has only the intention of a cheap loan, they're not going to make that possible due to the above. Not to mention if they did allow this then they potentially set a precedent that compromises one of their main revenue streams - they are a business after all.