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1 The web seminar has not yet started: A sound check will be performed 5 minutes before the start time. COPYRIGHT NOTICE USE OF WEBEX LOGIN/PASSWORD FOR ACAMS WEB SEMINARS Each site license entitles registrant to one login: one phone connection (if accessing audio via teleconference) and one Internet connection for simultaneous Webcast, in one room where an unlimited number of listeners may participate. Providing your login instructions and password to another for their use, using your login ID/password more than once, or any simultaneous or delayed transmission, broadcast, retransmission or re-broadcast of this event to additional sites/rooms by any means (including but not limited to the use of telephone conferencing services or a conference bridge, whether external or owned by the registrant) or recording is a violation of U.S. copyright law and is strictly prohibited.

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5 Welcome to the ACAMS Web Seminar Emerging Crime Trends in Digital Wallets and Mobile Banking June 5, :00 Noon 2:00 pm ET The web seminar has not yet started. 5

6 Welcome to the ACAMS Web Seminar Emerging Crime Trends in Digital Wallets and Mobile Banking June 5, :00 Noon 2:00 pm ET 6

7 Jeff Ross SVP, BSA/AML Officer Green Dot Bank Nate Wehunt SVP & Digital Channels Manager City National Bank Myrna Olvera SVP & Operations Risk Manager City National Bank

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47 FinCEN Mobile Payments Testimony June 29, 2012, FinCEN Director Freis testified on mobile payments before a House Financial Services Subcommittee. For the sake of clarity, let me emphasize that a payment system allowing the transfer of funds from one mobile phone to another, such as by reference to a phone number, is subject to FinCEN s regulations for prepaid access. Telecommunication systems and financial mechanisms may merge and become interwoven in the same overall mobile payments transactions. This transactional overlap provides multiple informational choke points that potentially lead to each other, which may, in turn, actually pose a benefit to law enforcement in their efforts to follow the money trails and id other accounts and transactions associated with a given subjects(s).

48 General Purpose Reloadable Prepaid Players CONSUMER Issuer Financial Institution member of a card network Issuer Processor Transaction processing May also provide customer care, risk mgmt, process & report disputes. Program Manager Under direct supervision / contract of Financial Institution, designs & runs the card program, may also provide customer care, risk management, etc Network Switches transactions, provides risk management and strict operating rules and regulations Acquiring Processor Provides transaction processing and customer support for merchants Seller/ Distributor S Endpoint locations where prepaid cards are sold to consumers; Online, Retailers or Malls, Financial Institution Branches Load Reload, Networks A merchant accepting value loads OR A MSB operating a network to provide reload services to cardholders through reload sites

49 Green Dot Corporation Green Dot Corporation (GDC) is a publicly-traded bank holding company and helped pioneer the retail reloadable, prepaid access card and its products and services through more than 60,000 stores nationwide. GDC processes customer applications, collects and verifies certain customer information and monitors card activity on behalf of the banks issuing the cards we service. In December 2011, GDC was approved by the Federal Reserve to purchase Bonneville Bank in Utah, and establish Green Dot Bank which issues its own cards. 49

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51 Customer In Money-In Money-Out There are three ways a new customer can activate a card; all use the same verification rules. Temporary card is activated. Personalized Card with ATM access arrives in the mail. Identity verification, including OFAC (Experian, Lexis-Nexis) Internal Negative Database # of Cards/ ID theft mitigating out of wallet questions generated Generic Nonreloadable card with no ATM Access is activated. or Customer can opt for a Refund Check in the mail.

52 GD AML Choke Points Customer In Card Out (online especially) Money (Tax/Benefits) On Spend may be useful in layering of frauds context, but more difficult to track than cash off Money Off/Cash Out some utility, but, in tax refund context, legitimate and illegitimate activity may look similar, and mask criminal activity 52

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54 Customer In Controls USPS Address Standardization Negative Match Out of Wallet (public records-based) questions (LN Instant Authenticate) across retail/online for new customers. Green Dot limits overall online customers to 3/SSN. Green Dot mandates a verified name to verified SSN, and denies approval for deceased SSNs and prison SSNs. GD employs no SSN Finder capability approvals. Card holder must receive personalized card at a fixed address for ATM access. Green Dot runs OFAC and PA customer identification on all incoming customers. 54

55 Card Out/ID Theft Controls GD monitors and closes cards across SSN for configurable same address/phone/ numbers/computer device High-risk phone numbers (pager/invalid) High-risk addresses Address linked to multiple cards by day/week/month GD monitors for change-of-address requests w/in configurable time frame from activation on tax program/benefits cards, and does not permit requested address changes. Multi-State loading above configurable amount GD uses Iovation to identify online activity originating at the same computer device. 55

56 Money On(Tax Deposits) Tax/benefits authority must include SSN or last 4 of SSN on the ACH Tax/benefits authority must reference that funds are Tax Refund/Benefits on ACH Card program monitors for inbound SSN mismatches to c/holder SSNs and tax/benefits program indicators Card program and tax/benefits authority can limit number of mismatches (or set to 0. ) Card program can monitor for account inactivity and close on configurable basis GD will use R17 refund mismatch return code to assist IRS. 56

57 Money Out/Spend Green Dot does not permit ATM or PIN debit access to a temporary card. Must receive and activate permanent card from identified address. Green Dot monitors for foreign and merchant spend. Green Dot can and has limited/blocked foreign spend/pull by country. Green Dot monitors and closes for ATM pull activity globally.

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59 GDN Fraud/AML Controls GD monitors all GDN load activity AML counterpart at all card/paypal reload partners Hard Stop Card limits for number/value reloads by day/week/month Retail velocity Reports id unusual sales patterns 7 Day GDN reload Report id cross card program loading Multi-State Reload Report by value and time period ID computer devices loading fraudulent MoneyPaks SAR filing

60 Questions/Contacts Jeff Ross SVP, BSA/AML Officer Green Dot Bank Green Dot Corporation

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62 If you have additional questions for today s experts, or suggestions for future web seminars, please send those to: training@acams.org Thank you for joining us today! 62

63 Web Seminar Certificate of Attendance To request a certificate of attendance, please fill out the request form, found in your reference materials, and the form to info@acams.org along with your payment information. First certificate is included in cost of seminars. There is a $40 administrative fee for each additional certificate. You may also call to process payment over the phone. 63

64 Future Web Seminars JUNE 12 JUNE 14 FREE JUNE 26 Effectively Analyzing, Organizing and Communicating AML Metrics Level: Intermediate/Advanced Noon to 2:00pm EDT Exposé: Lessons from an Online Gambling and Bank Prosecution Level: All 2:00pm 3:00pm EDT Spotlight on Large Institutions: Conducting Enterprise-Wide AML Risk Assessments that Go Beyond the Expectations of Examiners and Senior Management Level: Intermediate/Advanced Noon to 2:00pm EDT