Unlike cash-only transactions, credit card holders are
protected by their card-issuing banks and the credit card companies themselves
in the event of fraudulent transactions and unauthorized payments through their
credit cards. This is one of the reasons why many fraudsters use money transfer
service outlets and cash-only remittance centers for their money scams.
It's also quite difficult for
solo scammers to be able to accept credit card payments online. They
would need an online merchant account to do this, which is only available to
solo traders and businesses that pass the rigorous underwriting procedures of
acquiring banks, merchant account providers, e-wallet platforms and third party
payment processors. They don't want to go through all the hassle of preparing
fake documentation (since they don't obviously want to expose their real
identities), registering a business under their real name (it's quite difficult
for a non-resident to set up a business with a local bank account in the USA,
Canada, the UK, Australia and the like) and applying for a merchant account
(it's generally difficult for newly registered businesses to be approved). So,what most of them do is to simply use cash-only transactions for their money scams.
Other Reasons Why Money Transfer Services Are Used for Money
Scams
Almost all scammers and criminal groups don't want to lose
the money that they essentially stole from the victims of their money scams.
New merchant accounts usually have longer payout clearance periods than established
accounts. This means when their victims file for chargebacks, unauthorized
payment claims and disputes - The withheld money that's sitting in their
merchant accounts will be returned to their victims. They can't obviously get
established merchant accounts, since that requires several months or even years
of legitimate transaction records.
Another reason why they prefer to use money transfer service
outlets and cash-only remittance centers for their money scams is the level of
anonymity that this provides them, unlike having a merchant account to process
payments from their victims. Many scammers and criminal syndicates that operate
fraudulent activities on the Web are mostly based in developing countries. A
lot of these areas have minimal verification procedures for receiving money
transfers and remittances.
This means they can simply get a fake ID or some bogus
documents, and show it to those remittance outlets and money transfer service
centers. They'll get the cash that they stole through their money scams without
issues. They don't care if these outlets charge exorbitant fees for their
services.
This also makes it more difficult if not impossible to track
them down and expose their real identities. By using fake IDs and documents at
those remittance centers and money transfer outlets, nothing can be used to
trace the transactions back to their real identities. This is how they can get
away with the cash that they generate from their money scams.
So, you should watch out for money scams that are disguised
as lucrative Internet investment opportunities, viable online business
ventures, get rich quick schemes and the like. In many cases, the scammers who
operate those fraudulent schemes would most likely be using money transfer
services and cash-only transactions for their bogus offers.
