It’s simple, this money laundering stuff

By Consult Hyperion posted 14/09/2012 at 16:34. 4 comments

[Dave Birch] I wanted to send some money from my UK bank account to my US bank account.

I logged in to do this via my bank's online service but noticed that they want to charge me £25 for sending a few bytes of data. So I googled around for alternatives and I noticed that the UK Post Office are advertising a free service. So I decided to give it a try.

Remember, I do this so you don't have to.

I logged on and set about creating an account, which didn't take too long. But I couldn't use my account to send any money. There was no "make a payment" option. I couldn't figure out why, but by then I was too tired to think about it any more so I forgot about it. The following day, I saw an e-mail from Post Office International Payments saying that "To activate this facility we will require a conversation with you over the telephone". I got a cup of tea and dialled. The nice lady at the other end of the line said that she needed to ask me a few questions because I had failed some kind of identity check.

Well, I suppose I could see why I I'd been flagged: after all, I've only lived at the same address for the last 17 years and only had the same bank account for the last 35 years. She asked me if I'd ever lived abroad. I said yes and she asked me where. I started by saying that in the early 1980s I lived in Indonesia. She asked me what I was doing there. I told her I was working on there. She asked me what I was doing, so I began to explain to her about the Palapa B-1 regional satellite system. I thought that if I explained my pioneering role developing X.25/X.28 software to run data networks over a slotted ALOHA satellite channels it would help with my KYC. I imagine that this is the sort of thing that can trip up even the most dedicated terrorists and money launders. If I had, for example, said that the Hughes HS-376 satellite launched in June 1983 used three solar panels then she would have hit the panic button immediately, because as most Post Office employees are well-aware, the spin-stablised 376s had only two solar panels.

After going through the places where I had lived abroad, which took some time, we then moved on to why I wanted to send the money to the US. I explained that I was an international drug dealer and that I needed cash to purchase supplies of Ketamine. No, I'm only joking, although once again I suppose that had I really been an international drug dealer, that's just the sort of question that would have tripped me up. I actually told her that I go to the US frequently, that I don't want to use my UK credit card because of the rubbish rates and penal F/X charges and that I was a bit annoyed with my prepaid US dollar card because it doesn't always work. So I was going to use my US debit card instead and so needed to top up my checking account.

The conversation continued, ranging over how often I was thinking about sending money to the US and so on. At the end, she told me that they would be back in touch to let me know when I would be allowed to send money. Oh well. I was leaving for the US tomorrow, so I ended up transferring money over to my prepaid card anyway. When I got to the US, there was an e-mail telling me that I could now send money, so I logged back in to the Post Office and sent the £250, which if memory served took about four days to get to the US. I should have drawn it out in cash and brought it with me on the plane, as that would have been three-and-a-half days quicker.

If I have to go through this bullshit -- which was colossal waste of their time and money as much as it was of mine -- to send £250 to the US, I wonder how third-world kleptocrats manage to salt away billions? The only conclusion that I can draw is that stringent KYC/AML imposes high costs and inconvenience on people like me -- and holds up the progress of new payment and other financial services innovations -- but is no more than minor inconvenience to drug dealer, money launderers, corrupt politicians and tax avoiders worldwide. That one phone call has already cost the Post Office more than the F/X margin that they'll make on my transaction, and to what end?

These are personal opinions and should not be misunderstood as representing the opinions of
Consult Hyperion or any of its clients or suppliers

Comments

It sounds similar to Barclays PingIt: they first verify your bank account (to open which you had to be KYCed), they then lock your money until they can KYC you AGAIN - http://www.finextra.com/community/fullblog.aspx?blogid=6897

Posted by: Alexander Peschkoff on 15/09/2012 at 23:33.
£250? You're going to have to do something about your credibility, Dave.

Patrick Radden Keefe
June 15, 2012
The new York Times
Cocaine Incorporated:

"... the business generates such volumes of currency that there is only so much you can launder or reinvest, which means that money can start to pile up around the house. The most that Martínez ever saw at one time was $30 million, which just sat there, having accumulated in his living room. In 2007, Mexican authorities raided the home of Zhenli Ye Gon, a Chinese-Mexican businessman who is believed to have supplied meth-precursor chemicals to the cartel, and discovered $206 million, the largest cash seizure in history. And that was the money Zhenli held onto — he was an inveterate gambler, who once blew so much cash in Las Vegas that one of the casinos presented him, in consolation, with a Rolls-Royce. “How much money do you have to lose in the casino for them to give you a Rolls-Royce?” Tony Placido, the D.E.A. intelligence official, asked. (The astonishing answer, in Zhenli’s case, is $72 million at a single casino in a single year.)."

Posted by: David Moss on 17/09/2012 at 00:37.
Well here is more of the same, I am travelling this weekend to Spain. Remembering your post, I was a good boy and this time (and for a change), decided to bend my right to freely travel through the EU a little and call the card company to give them a heads up.

Step one, who to call? I had some correspondence from them in front of me, so I called the international number rather than their advertised 0845 number. Otherwise and before I get started I would have been making a contribution to their bottom line.

Step two, the actual call. I was asked for my 16 digit card number twice: once by the machine and then by the human. I really get frustrated by this. Happens every time.

Step three, the surprise.. was that in spite of me calling they could not assure me that my card would not be declined and/or they would call to confirm a transaction (to my UK mobile as their system would not take my Spanish mobile.. again me having to contribute with the ROAM in charge).

So much for following procedure and how payment systems are very much inward looking.

Posted by: Bernardo Batiz-Lazo on 20/09/2012 at 11:33.
You appear not to understand about serious money laundering. All these laws are more about suveilling you. If you want to do serious money laundering you have to partner with the biggest banks.
http://www.guardian.co.uk/business/nils-pratley-on-finance/2012/jul/17/hsbc-money-laundering-barclays
http://www.bloomberg.com/news/2010-06-29/banks-financing-mexico-s-drug-cartels-admitted-in-wells-fargo-s-u-s-deal.html
http://globalresearch.ca/aig-is-a-legal-money-laundering-ring/
etc
etc
etc

Posted by: matslats on 24/09/2012 at 10:46.

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