Business sector specific Guidance: Money Service Businesses: Cheque Cashers and Money Laundering Risks
- In comparison with Currency Exchange Offices and Money Transmitters the money laundering risks in a cheque cashing business are considered to be low. This is because the function of the cheque casher is to convert a non cash item (a cheque) into money whereas a money launderer is seeking to do the opposite. They are not therefore likely to be at risk to money laundering on a large scale.
- The greatest risk faced by a cheque casher comes from deception by the customer. Cheques can be stolen and presented for payment or tampered with so that the name, date or amount payable is changed.
- Cheque cashers may also be used by individuals who are committing tax evasion and or benefit fraud. Wage or benefit cheques do not pass through the customer’s bank account making it harder to detect that the customer is in receipt of income.
- Where a cheque casher carries out pawnbroking there is a separate risk that the goods that are pledged may be stolen property.
- If the business offers payday loans and debit card advances there is a risk that the customer might be making use of a stolen chequebook or debit card.