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Gift cards carry a surprisingly high fraud/AML risk. If a code ends up being part of a stolen-card → resale → redemption chain (which is more common than people
by ursAxZA 10mo ago
Gift cards carry a surprisingly high fraud/AML risk.
If a code ends up being part of a stolen-card → resale → redemption chain (which is more common than people think), companies like Apple may actually have to lock the entire account.
So the trigger might not be arbitrary—it may just be a side effect of how risky gift-card-based payments are.
- DamonHD 10mo agoI spent a long time working in finance one way or another, including as a founder/director of a small e-money issuer, and I have at least from this time ASSUMED that gift cards carry a very inflated AML risk. Plus I have no desire to carry scrip when I could have fungible cash or equivalent, so I would not buy a gift card. I have received a few.
- ursAxZA 10mo agoI think you’re operating with the right mindset. Looking at the linked story, the trigger seems to have come from redeeming a gift card bought at a major retailer. Even if the purchaser uses a legitimate store, the user can’t really know the full supply-chain history of a prepaid code, and that uncertainty alone creates room for unexpected flags. For people who already have a credit card, gift cards are a fuzzy choice if the goal is simply to load balance onto an account. Something somewhere in the chain probably tripped a rule — maybe fraud-related, maybe a processing anomaly — and from the outside it’s impossible for the user to see which.