Pre-paid card is it "traceable" & can it work a bit like a savings account?

AppleOfHisEye

I have looked at a few pre-paid cards but not exactly sure how they "work".  

Are they a bit like a savings account but with no interest in that I take the card for eg to the post office to load it up by cash and then that is recorded online somewhere? 

Is it like having a savings account in my own name and would it be trackable?

Is there a limit to how much money you can "load" onto one card and is there any security (like banks keep your first £85K safe even if they fold themelves)?

Thanks

bris

Yes it's traceable. You cant open a pre paid card without strict verification processes. Everything loaded on to the card is of course traceable and still very much under in the radar of money laundering regulations.

jbrassy

It would be helpful if you could be more specific about which pre-paid cards you have been looking at.

If I were to guess, I think you're referring to Revolut and the like? If so, these pre-paid cards rarely have FSCS protection up to £85k because they do not have a banking licence (they are regulated as an e-money firm). This regulation also means that they are not allowed to pay interest on balances. Finally, yes, the transactions are trackable, these companies still need to comply with anti-money laundering regulations. 

It would also be good to know why you want to take out one of these pre-paid cards? Are you planning to use them abroad?

AppleOfHisEye

jbrassy said:

It would be helpful if you could be more specific about which pre-paid cards you have been looking at.

If I were to guess, I think you're referring to Revolut and the like? If so, these pre-paid cards rarely have FSCS protection up to £85k because they do not have a banking licence (they are regulated as an e-money firm). This regulation also means that they are not allowed to pay interest on balances. Finally, yes, the transactions are trackable, these companies still need to comply with anti-money laundering regulations. 

It would also be good to know why you want to take out one of these pre-paid cards? Are you planning to use them abroad?

I was looking at "Transferwise" as it seems largely free to use and says OK to use in the UK (as long as UK currency) and I wanted it jut to use in UK.  The idea was for my son, he is going to high school soon and becoming more independent but the benefits system start to penilise me if I have access to money anywhere that overall goes over £6K.  I doubt he is old enough yet to have it in his name so it would need to be in my name and therefore it would be seen as if this were "my" money and whilst I don't often get near £6K in savings it could soon mount up if I am putting money on such a card for him and I might end up (via that) accidentally going over the £6K and getting the benefits system penatlies for having such "funds". 

Grumpy_chap

It might not be the best training in financial discipline to get your son into the habit of using a 'credit card' style of payment too soon.

AppleOfHisEye

Grumpy_chap said:

It might not be the best training in financial discipline to get your son into the habit of using a 'credit card' style of payment too soon.

It was more for when he is at school which he needs to learn to travel to and from by himself, if he ends up getting lost I'd rather he had least some "money" on him as such rather than actual cash.

born_again

AppleOfHisEye said:

jbrassy said:

It would be helpful if you could be more specific about which pre-paid cards you have been looking at.

If I were to guess, I think you're referring to Revolut and the like? If so, these pre-paid cards rarely have FSCS protection up to £85k because they do not have a banking licence (they are regulated as an e-money firm). This regulation also means that they are not allowed to pay interest on balances. Finally, yes, the transactions are trackable, these companies still need to comply with anti-money laundering regulations. 

It would also be good to know why you want to take out one of these pre-paid cards? Are you planning to use them abroad?

I was looking at "Transferwise" as it seems largely free to use and says OK to use in the UK (as long as UK currency) and I wanted it jut to use in UK.  The idea was for my son, he is going to high school soon and becoming more independent but the benefits system start to penilise me if I have access to money anywhere that overall goes over £6K.  I doubt he is old enough yet to have it in his name so it would need to be in my name and therefore it would be seen as if this were "my" money and whilst I don't often get near £6K in savings it could soon mount up if I am putting money on such a card for him and I might end up (via that) accidentally going over the £6K and getting the benefits system penatlies for having such "funds". 

I would be very careful, as any funds you move over would be traceable. As they would be coming out of your account. So while your account would be under £6K if someone from benefits looks over you accounts and find you have been moving X amount to your son to keep under the limit. You may find that you are called in for a fraud meeting.

>>>

6. Who can use our Services

6.1 You must be 18 years or over. If you are an individual, you must be 18 years or older to use our Services and by opening a TransferWise Account you declare that you are 18 years or older. We may ask you at any time to show proof of your age.

<<<

Fighter1986

AppleOfHisEye said:

jbrassy said:

It would be helpful if you could be more specific about which pre-paid cards you have been looking at.

If I were to guess, I think you're referring to Revolut and the like? If so, these pre-paid cards rarely have FSCS protection up to £85k because they do not have a banking licence (they are regulated as an e-money firm). This regulation also means that they are not allowed to pay interest on balances. Finally, yes, the transactions are trackable, these companies still need to comply with anti-money laundering regulations. 

It would also be good to know why you want to take out one of these pre-paid cards? Are you planning to use them abroad?

I was looking at "Transferwise" as it seems largely free to use and says OK to use in the UK (as long as UK currency) and I wanted it jut to use in UK.  The idea was for my son, he is going to high school soon and becoming more independent but the benefits system start to penilise me if I have access to money anywhere that overall goes over £6K.  I doubt he is old enough yet to have it in his name so it would need to be in my name and therefore it would be seen as if this were "my" money and whilst I don't often get near £6K in savings it could soon mount up if I am putting money on such a card for him and I might end up (via that) accidentally going over the £6K and getting the benefits system penatlies for having such "funds". 

So you want to siphon off and hide funds from the UK benefit system?

This is money laundering, and benefit fraud.

You absolutely shouldn't be contemplating such actions whatsoever, least of all involving your son in such dire criminal offences.

The whole reason the £6,000 rule exists is that if you're in receipt of such an income that you can save that much, you don't need to be so heavily reliant on the welfare state. The support is there for desperate people in desperate situations on the breadline; not those with in excess of £6,000 in the bank.

We should all be so lucky. 

We aren't going to help you commit fraud or involve your son in such actions.

I think you'd best re-think your approach to what you consider acceptable.

That aside, if you want to support your son, and pay his allowance into his account, he can open a bank account in his name with any bank from the age of 14 with you there to co-sign for the account.

Make sure he knows how to use an account legally, we've already had a 14 year old on here who allowed his account to be used for laundering money, which was subsequently closed by the bank. This individual's parent was trying to defend their son's actions because he's autistic; but it's the parents responsibility to supervise account activity with a minor and teach them how to responsibly and legally bank, along with lessons about all the possible consequences. 

Read up on "Money mule" and make sure he knows how to be defensive against people trying to do this. He must never allow anyone else to obtain his bank details for any reason, if he sells anything he should ask for cash or payment via paypal. We had another teenager on here recently who had his account closed because he (allegedly) sold an iPhone on Gumtree and allowed the "buyer" to pay the money into his account in four separate amounts from "the buyers cousins" (likely storey). End result, account closed, and he'll have a fraud marker against him for six years. 

It might be worth going with him to the shops on occasion and only handing him his card at the till so he gets accustomed to using chip and pin, be there with him while he logs into online banking (maybe keep the login details to yourself) and ease him into banking gently with plenty of supervision to ensure he learns safe, legal, defensive banking. 

Emmia

If you're looking for something for your son, there are products like gohenry or rooster.

AppleOfHisEye

Fighter1986 said:

AppleOfHisEye said:

jbrassy said:

It would be helpful if you could be more specific about which pre-paid cards you have been looking at.

If I were to guess, I think you're referring to Revolut and the like? If so, these pre-paid cards rarely have FSCS protection up to £85k because they do not have a banking licence (they are regulated as an e-money firm). This regulation also means that they are not allowed to pay interest on balances. Finally, yes, the transactions are trackable, these companies still need to comply with anti-money laundering regulations. 

It would also be good to know why you want to take out one of these pre-paid cards? Are you planning to use them abroad?

I was looking at "Transferwise" as it seems largely free to use and says OK to use in the UK (as long as UK currency) and I wanted it jut to use in UK.  The idea was for my son, he is going to high school soon and becoming more independent but the benefits system start to penilise me if I have access to money anywhere that overall goes over £6K.  I doubt he is old enough yet to have it in his name so it would need to be in my name and therefore it would be seen as if this were "my" money and whilst I don't often get near £6K in savings it could soon mount up if I am putting money on such a card for him and I might end up (via that) accidentally going over the £6K and getting the benefits system penatlies for having such "funds". 

So you want to siphon off and hide funds from the UK benefit system?

This is money laundering, and benefit fraud.

You absolutely shouldn't be contemplating such actions whatsoever, least of all involving your son in such dire criminal offences.

The whole reason the £6,000 rule exists is that if you're in receipt of such an income that you can save that much, you don't need to be so heavily reliant on the welfare state. The support is there for desperate people in desperate situations on the breadline; not those with in excess of £6,000 in the bank.

We should all be so lucky. 

We aren't going to help you commit fraud or involve your son in such actions.

I think you'd best re-think your approach to what you consider acceptable.

That aside, if you want to support your son, and pay his allowance into his account, he can open a bank account in his name with any bank from the age of 14 with you there to co-sign for the account.

Make sure he knows how to use an account legally, we've already had a 14 year old on here who allowed his account to be used for laundering money, which was subsequently closed by the bank. This individual's parent was trying to defend their son's actions because he's autistic; but it's the parents responsibility to supervise account activity with a minor and teach them how to responsibly and legally bank, along with lessons about all the possible consequences. 

Read up on "Money mule" and make sure he knows how to be defensive against people trying to do this. He must never allow anyone else to obtain his bank details for any reason, if he sells anything he should ask for cash or payment via paypal. We had another teenager on here recently who had his account closed because he (allegedly) sold an iPhone on Gumtree and allowed the "buyer" to pay the money into his account in four separate amounts from "the buyers cousins" (likely storey). End result, account closed, and he'll have a fraud marker against him for six years. 

not sure how to take just bits of quotes so.............

"So you want to siphon off and hide funds from the UK benefit system?"

I know most of us have been in lockdown for a while but there is really no need to be rude.  As far as your question is concenred then of course not.  We are allowed £6K in savings and up to £16K to still be in the system.  I could be all reckless and crazy like I expect you think most "benefit people" are and spend whatever I wanted all on myself, go gambling, drink until I can no longer walk etc etc and I am entitled to do that.  I am entitled to spend anything below that £6K on anything I want, the Government do not get to tell me "oh sorry you can't spend your benefits money on gambling"....might be hard for them to tell which bit of the money is actually benefits and which is SALARY from our working.  However, rather than being all reckless and crazy I prefer to be sensible with my money and if I wish to put some into a place for MY SON to use if he gets lost travelling around on his own then I think there should be some kind of system in place where a parent can do that for their child and not penilise us for being sensbile.

"The whole reason the £6,000 rule exists is that if you're in receipt of such an income that you can save that much, you don't need to be so heavily reliant on the welfare state. The support is there for desperate people in desperate situations on the breadline; not those with in excess of £6,000 in the bank"

Really, is that why is there.....so.........in a few months when there is likely to be mass unemployment from Covid then people like me who have the £6K due to working and are now facing redundancy and Universal Credit should just rue how sensible we were keeping some money in savings and take the "benefit person" root of  live right up the the hilt of your income every month so that I too can step my toe into that lovely water of increasing debt?  Perhaps I should also rue paying off my mortgage in such a sensible way a that means I canot claim the hundreds everyone else seems to be claiming to pay their rent from the benefits system.   I'll keep that in mind and wipe my brain into "reckless" land when the time comes to it.

"That aside, if you want to support your son, and pay his allowance into his account, he can open a bank account in his name with any bank from the age of 14 with you there to co-sign for the account"

He has a few years before he is 14 yet and it is a similar situation if I have any way of accessing "his" money.  We will, however, once we are in a position to be able to afford it again, pay into something that he and only he can access when he is 18, apparently that really does count as "his" money.  Perhaps all the benefit people should "siphon off" their excess benefit money to their offspring in such a way in order to ensure they keep their benefits.

"Read up on "Money mule" and make sure he knows how to be defensive against people trying to do this. He must never allow anyone else to obtain his bank details for any reason, if he sells anything he should ask for cash or payment via paypal. We had another teenager on here recently who had his account closed because he (allegedly) sold an iPhone on Gumtree and allowed the "buyer" to pay the money into his account in four separate amounts from "the buyers cousins" (likely storey). End result, account closed, and he'll have a fraud marker against him for six years."

Sheesh that is horrible poor lad.  I'm glad I just read up on that.  Good advice for me too though.

Fighter1986

It was the sentiment of trying to find an untraecable way of moving money elsewhere I was calling into question. Apologies if I took too hard a line, we have all sorts come on these forums. 

You've clearly been very sensible with your money and I applaud that, but I wouldn't want you, your family, or anyone else to do anything that could be considered questionable in the eyes of the law. You've worked too hard to fall foul of that. 

Barclays and NatWest allow a child to open an account from the age of 11 with parent present. Perhaps this is the best way forwards?