CAMS · Question #223
CAMS Question #223: Real Exam Question with Answer & Explanation
The correct answer is B. A non-bank customer regularly loads large amounts of cash onto several prepaid cards.. According to the CAMS Study Guide, page 191, "Reloadable open-loop prepaid cards are a high- risk product for money laundering because they can be used to store and move large amounts of funds anonymously. They can also be used to access cash at ATMs or through cash-back transact
Question
Options
- AA bank customer historically purchases several prepaid cards near year-end.
- BA non-bank customer regularly loads large amounts of cash onto several prepaid cards.
- CA non-bank customer consistently uses the bank to obtain cash advances using a prepaid card.
- DA bank customer routinely purchases five prepaid cards in small even-dollar amounts on a
Explanation
According to the CAMS Study Guide, page 191, "Reloadable open-loop prepaid cards are a high- risk product for money laundering because they can be used to store and move large amounts of funds anonymously. They can also be used to access cash at ATMs or through cash-back transactions at merchants." Therefore, option B is a red flag that may indicate money laundering, as a non-bank customer who regularly loads large amounts of cash onto several prepaid cards may be trying to avoid identification, verification, or transaction reporting requirements.
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