Like any business organization, terrorist groups have both one-time costs and recurring expenses. Staging a terrorist attack can be relatively cheap, but there are also the various day-to-day expenses of maintaining a terrorist cell, including food and travel costs. To cover their needs, terrorists require funding.
Credit cards are one avenue available for terrorist financing. Criminals — and I don’t think terrorists are any exception — will use all types of payment alternatives. Credit cards are just one thing they will look to.
Experts consulted for this article would not go into detail on specific cases, for fear of providing instructions, but in general, they said the appeal of credit cards is simple.
Terrorists and their global support networks choose to finance activities with debit and credit cards for the same reason that the rest of us do: Plastic makes for easy payments. Any financial vehicles that are convenient for consumers are also convenient for terrorists.
While a drug trafficker may seek to hide the source of ill-gotten gains when transferring money into the legitimate financial system, terrorists launder money “not to hide the source of the money, but to hide the ultimate purpose of the money. For example, by funneling funds from a legitimate charity, terrorists may not need to derive their funds illegally.
Moving the money
As an example of how terrorists employ credit cards, Myers gives the hypothetical scenario of a terrorist cell in the European Union that wants to carry out an attack on U.S. soil. A credit card obtained in Europe is simply handed to the cell member who travels to the United States to execute the attack.
Prepaid cards and gift cards offer a similar benefit: They can be loaded with money and then easily transported to another place for terrorist activity. “Stored value is convenient and it can be anonymous.
Another technique used to transmit funds involves cell phones linked to a prepaid card or credit card account — a common option overseas. A terrorist can link the card to his mobile phone, which can then be used to wire money over the wireless network to a fellow cell member who may be in another country altogether.
Experts highlights the speed of this process, saying that it takes just two minutes to register the cell phone and seconds to transfer funds to the person on the other end.
The evidence of the transfer would perhaps amount to little more than a transaction detail on the terrorist’s credit card statement.
With terrorists, there is some gray area in regards to what constitutes money laundering. Everyday costs, like groceries, can also be charged to the terrorist’s credit or debit card. “Is it money laundering. “By the technical definition, it’s not money laundering. Is it facilitating a terrorist cause? Yes it is.
Ever resourceful and creative, terrorists have a variety of techniques for moving funds around. “There are as many different schemes and scenarios out there as there are money launderers. Regardless of the scheme, the goal is the easy movement of funds for terrorists: “They can fly under the radar screen.
Terrorism and credit card fraud
Terrorist cells often seek to blend in, so careful use of credit is important. “The terrorist is looking to be as vanilla as possible. Since they don’t want the risk of drawing added attention, “Terrorists by and large will only open up legitimate credit cards.
Even when credit card information is stolen or a fraudulent account is set up, terrorists still play it safe, making sure they pass the verification tests and avoiding large account deposits while paying off charges incrementally. “The more anonymous they are, the more problematic they are from a money laundering perspective.”
Account information from legitimate credit cards becomes a valuable commodity for terrorists. “Terror groups and criminal organizations use credit card cloning and skimming to fund themselves,” says Loretta Napoleoni, author of “Terror Incorporated: Tracing the Money Behind Global Terrorism.” “Cloning is done primarily via the Internet. Skimming requires use of the actual card, so it is done in restaurants and stores,” she says. “It is a very popular and easy technique.” Experts also note that the theft of a laptop or computer database security breaches can produce a treasure trove of credit card information for fraudsters.
How much credit card fraud is tied to terrorism?
Yet it is happening. Fraud is an unbelievably profitable business. “We don’t have any way to know how much of that credit card fraud is related to terrorism. It may be higher than we even know about.
Therefore, consumers can play an active role in preventing terrorist funding by staying alert to credit card fraud. “The more diligent consumers can be to protect their data, the better.
“Consumer attention to credit card fraud is crucial because the more that people are aware of fraud, the less likely it is to work. “Preventing terrorist financing is an international effort with many components, but consumer awareness is certainly important.”