Why Is The Internet Important To Money Laundering ?  

Today many countries have aggressive anti money laundering policies which are making it more and more difficult for criminals to use the traditional methods of laundering money. That is why new methods are being found to launder money and one of them is the Internet.

With globalization, Internet has paved the way for online payment services. Many individuals and online merchants are now using various online payment services through the Internet. Many individuals who use online payment services do not have bank accounts or have not been able to qualify for credit cards. Therefore, online payment services allow these individuals to shop online and make person-to-person cash transfer. Many online merchants are more than willing to accept electronic payments as they are less expensive than accepting credit cards.

These online payment services are situated all over the globe and people can use their credit cards, wire transfer, and money order to fund their online accounts with these payment services. Using the account, people can shop, participate in online auctions and even gamble and access adult websites. People living in the US can use online payment services that are located outside the US and transfer money to their accounts electronically or by mail.

Most online payment systems have their own terms and conditions and are not forced to follow any financial regulation or to offer consumer protection. So, if a person is defrauded, he may not get his funds back. That is why online payment systems are being used for fraudulent and illegal activities.

Online payment services do international person-to-person payments. That is why they play a big role in money laundering as the jurisdiction of one country cannot pursue legal actions once the funds are transferred out of the country. Although people use credit cards, bank accounts, wire transfers and many other modes to fund their accounts, most online payment services do not have proper methods for customer identification and recordkeeping. So, once a service provider accepts cash to fund the account, law enforcement agencies can do nothing.

The anonymity offered by online payment systems make it very easy to launder money and that is why the Internet is important to money laundering.

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Why Is The Internet Important To Money Laundering

Check-Cashing-Anti-Money-Laundering-Policy      Money laundering is a criminal offense where ill-gotten money is filtered through a maze of transactions to make it look as if the money has come from legal sources. Money laundering is primarily done using three steps, namely placement where the money is placed into legal financial institutions; layering where the ill-gotten money is separated from its origin through complex financial transactions like converting the money to traveler's check, wire transfers, stocks, bonds, letters of credits, money orders or purchasing valuable assets; and integration where so-called legal transactions like making false loans and making payment for a false import/export invoice are undertaken to hide the illegal money and then disburse it back to the criminals. More..




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