Small and vulnerable businesses frequently become the target of money laundering. Criminals use the inability of such companies to protect themselves. While money laundering is considered to be one of the most serious crimes, small businesses are getting involved in dangerous schemes against their will. Before it is too late, you may check the AML software you can use to make your business more secure. Read this article to learn how to do it.
The Procedure of Money Laundering
The main concept behind this criminal scheme is to turn dirty money into clean. Dirty money is those that are used in illegal businesses and frequently involve drug deals. Owners of such money prefer to place them in some financial schemes to get rid of them and clean them. Usually, they pick deposits with small numbers that do not attract much attention. To get the clean money back criminals create multiple online accounts on websites that accept money depositing, to withdraw money without any criminal trace later.
Protection from Money Laundering: 5 Helpful Tips
Many business owners feel that they are secured from money laundering just because their business is small and not connected with anything criminal. However, usually, businesses that are hard to suspect in crime become easy targets for frauds. Protect yourself by learning the basic rules of safety.
1. Learn your customers
Despite being called a small business, you may have too many customers to know all of them in person, especially if you have an online store. Yet, you have to learn who your customer is. With this knowledge, you will both feel safer and will be able to improve the business based on your customers’ needs. Document the source of cash for big purchases. Find out who your investors are.
2. Read about money laundering and provide the information to your team
It is important to know how to avoid money laundering schemes used in your business. The US Treasury’s Financial Crimes Enforcement Network provides all the information you need. You can encourage others in your company to learn about criminal schemes and how to prevent them.
3. Pay attention to prepaid credit cards
Prepaid credit cards are commonly used in many countries. Some people even give them as presents to others. They are also frequently used in restaurants and grocery stores. Meanwhile, criminals also use them for dirty money laundering, as they are anonymous and hard to track. Pay attention to the customers who often visit your store and pay with these cards. You can contact the authorities and report the activity you find suspicious.
4. Ask your customers
If you find your customers suspicious, don’t hesitate to ask them several questions. You can be straightforward and ask about the reasons for using prepaid credit cards. Customers who have nothing to hide will answer you transparently.
5. Cybersecurity
Improve your security online. The cyber activity must also be monitored to protect you from risks. You can apply double security with passwords, or verify the client's entrance to the store with their personal information.
Which Method to Pick
Money laundering threatens small businesses all over the world. While millions of companies decide to go online, frauds choose the most vulnerable of them to clean the money. Besides potential criminal charges these businesses may face, the reputation on the market will never be restored. Thus, it is crucial for business owners to secure themselves, sticking to the basic rules we have discussed in the article.
