When people get scammed and money is transferred out of their bank, why isn’t there a paper trail? If the money is transferred into some foreign country that won’t allow tracing, why not just exclude those countries from the banking system?
In: 7825
Here’s an example scenario focusing on how it could work in the UK, in reality the trail can be a lot simpler but also a lot more complex from what I have seen over the years working in fraud. Customer is the victim of a scam and loses 40k in the form of 4 x 10k faster payments to different banks:
– 10k to bank 1 is used by a mule account controlled by fraudsters to buy jewellery and other expensive goods like phones and tablets (either in store or online it doesn’t matter, fraudsters will have ways to acquire the goods bought online through various methods I won’t go into here).
– 10k to bank 2 is distributed by the mule to a few different accounts at another bank (or multiple banks) where it is withdrawn in smaller amounts of cash. That cash could then be paid into accounts elsewhere or used to spend on goods.
– 10k to bank 3 is then immediately sent overseas via an international payment to one of the many SEPA countries for example Romania, what happens there is generally out my view but it will be very similar to domestic receipt, i.e. cash, goods, or transfers out to various other accounts.
– 10k to bank 4, bank 4 is actually a wire transfer or money order company such as Moneygram or Western Union. These money orders can be picked up from any number of locations around the world as cash, there are usually ID verification requirements but all is needed here is a willing participant in the country or fake documentation.
So you see the question of where has the money gone for a victim is actually all sorts of places, each of these has their own paper trail or is specifically designed in such a way where a paper trail is not feasible. Tracing funds does happen in some cases but as seen in the example it can be almost impossible to gain any traction bearing in mind that these examples also apply to every other bank that has received any of the money. Where transfers happen within the UK around different banks the issue is the lack of real-time inter-communication between banks to intercept fraud transfers however this can only happen when it suspected to be fraudulent or the customer has confirmed it, which often comes with a delay. When you go international it complicates things even further.
In terms of cutting off countries from the banking systems others have covered that, but the main thing is fraudsters and money launderers will adapt much quicker than the banks and law enforcement can, so if we cut off a country because of the fraud then they will just shift to a different one pretty much immediately.
That was a lot more words than I expected when I started typing. The example I did not use was crypto, no need to wash through multiple layers if you can just send it to Binance and then send on to another wallet operated by somebody located literally anywhere on the planet, although the ledgers are public there are plenty of ways to obfuscate the trail.
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