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Why it is not a good idea to use an offshore debit card in residential country?

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newNomad

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Jan 25, 2021
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#1
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Someone once mentioned that it is never a good idea to use a debit card linked to an offshore account (biz or personal) in a country where one is tax resident (residential country)...this having to do with CRS and that somehow by using it in the residential country one would be easily "tracked down" as having funds offshore
I didn't quite understand how is this possible? What personal data is exchanged when POS and ATM transactions are made? Is the TIN used also? To put it simply, how these transactions would be distinguished from those of any foreign tourist (non-resident)?
Debt cards are not a part of CRS...
 
#2
Whenever you use your card, it leaves a long-lasting record of the transaction, including personal information on the card (issuing bank, bank country, your name on the card). There have been a few sting operations where authorities requested all ATM records where cards issued in known had been used to withdraw cash. These records were then cross-referenced with tax filings, and people who had withdrawn more cash than made sense based on their tax filings were subject to audits.

This created a brief period where some banks were issuing no-name cards. These are still around but subject to very low limits and have largely gone away. But even those cards can be traced back to the cardholder/owner under TIEAs and other such arrangements, whereby the investigating government can ask the bank who owns card number ####.
 
#4
csp dubai said:
thw no neme card is quite hard to trace i think
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They are either subject to very low limits, or are easy to trace. As long as the cardholder was KYC'd at some point, the bank/issuer can turn over those records.

In case of false KYC (fake documents, synthetic or stolen identities), it of course becomes more difficult.

csp dubai said:
do you any contry who runthis operaton recently?
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There was a very big one in Scandinavia (mainly Sweden, IIRC) many years ago now. That's what triggered the no-name cards to gain popularity.

Since then, I've heard of spot checks in France and Germany. And US authorities routinely pull card usage for various criminal investigations.
 
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#5
@Sols
Ok but if during an ATM or POS operation only name+surname and bank details are used (and no other info) I believe it becomes quite difficult to pinpoint exact person - i.e. there might be multiple in some cases hundreds of people with same name+surname in that particular tax country and on top of that they would need to prove without doubt that the person withdrawing is exactly the one of residents in that jurisdiction and not just someone having same name+surname sitting elsewhere...
If TINs are used that makes it a bit easier though some offshore accounts don't even collect TIN...
 
#6
newNomad said:
@Sols
Ok but if during an ATM or POS operation only name+surname and bank details are used (and no other info) I believe it becomes quite difficult to pinpoint exact person - i.e. there might be multiple in some cases hundreds of people with same name+surname in that particular tax country and on top of that they would need to prove without doubt that the person withdrawing is exactly the one of residents in that jurisdiction and not just someone having same name+surname sitting elsewhere...
If TINs are used that makes it a bit easier though some offshore accounts don't even collect TIN...
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@newNomad

basically a few factors come into play,
1.card should be setup anonymously.
2.card should be from offshore jurisdiction not within the US/EU.
3.cards with no name plausible, though at point of setup card should be from Non CRS/Not actively reporting Nation.
4.if card would be used in certain jursidiction, then card should be setup with generic names popular with the region.
5. Card user must employ a consistent cashout via atm limit, a limit that would go under radar longterm.
6.cards setup should be with an Exotic BIN and as such card should be issued with OLC,P2PE.
7.Card cashout should be mixed..POS purchases/atm cashout at significantly atms based in malls where well known tourists traffic are recorded.

the above scenario would make any user highly untraceble,with above listed steps..moreso tracking by RA is solely based on violations of the perpetrator, and the amount involved...
 
#7
newNomad said:
@Sols
Ok but if during an ATM or POS operation only name+surname and bank details are used (and no other info) I believe it becomes quite difficult to pinpoint exact person - i.e. there might be multiple in some cases hundreds of people with same name+surname in that particular tax country and on top of that they would need to prove without doubt that the person withdrawing is exactly the one of residents in that jurisdiction and not just someone having same name+surname sitting elsewhere...
If TINs are used that makes it a bit easier though some offshore accounts don't even collect TIN...
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Ever heard of cameras in ATMs, license plate reading on a supermarket parking lot, cameras in store, smartphone in your pocket...etc. all connected to that guy with that credit card.
 
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#8
newNomad said:
@Sols
Ok but if during an ATM or POS operation only name+surname and bank details are used (and no other info) I believe it becomes quite difficult to pinpoint exact person - i.e. there might be multiple in some cases hundreds of people with same name+surname in that particular tax country and on top of that they would need to prove without doubt that the person withdrawing is exactly the one of residents in that jurisdiction and not just someone having same name+surname sitting elsewhere...
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It's not difficult at all. Have you ever used the vlookup function in Excel? Imagine that, but on a governmental level with the motivation and skills of a competent tax office.

The infamous Scandinavian raids did exactly that, and they had a pretty big harvest of tax dodgers (a few even went to prison, IIRC). They pulled all ATM records by cards issued in known tax havens and compared that with tax returns of people with matching names. Of course, not everyone was caught but it was effective enough that it had an immediate impact on how cards were being issued by offshore banks. That raid didn't even include any cooperation by the issuing banks. A repeat of that but with the issuing banks being forced to supply additional information of each cardholder would probably be even more effective.

If you live in a country with a poorly funded tax office, the risk is probably quite small that you're caught in a fishing expeditions. But you could still be caught in a targeted investigation.

Some jurisdictions have reverse burden of proof when it comes tax evasion (and money laundering). If you're caught in a raid like this and live in such a jurisdiction, it might be up to you to prove your innocence — and not up to the government to prove your guilt.
 
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#9
Sols said:
Whenever you use your card, it leaves a long-lasting record of the transaction, including personal information on the card (issuing bank, bank country, your name on the card). There have been a few sting operations where authorities requested all ATM records where cards issued in known had been used to withdraw cash.
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Yeah, but then the original statement of the author would become, more accurately:

it might not be a good idea to use any bank card in a country where one is a tax resident, if and only if one uses it to operate with relatively large sums of money.



On the other hand, if I a) withdraw $1k/mo and b) also buy some stuff for $2k/mo in shops,

which will result in $3k/mo in total, would anyone care at all?
Let's even double, or triple that amount.

That is, $3-6 or 9k/mo -- regular monthly life-spendings.
 
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#10
lloyd320 said:
On the other hand, if I a) withdraw $1k/mo and b) also buy some stuff for $2k/mo in shops,

which will result in $3k/mo in total, would anyone care at all?
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I don't know. How long is a piece of string?

It depends on the surrounding circumstances. 3,000 USD/month in a high-income wealthy country might not be detected, but on the other hand those are the countries with the most competent tax authorities. 3,000 USD/month in a lower-income country can stick out.

It's all about your own risk tolerance. If you do it, you create a risk of being caught. How big that risk is impossible to quantify without knowing your exact personal situation and threats.
 
#12
rowena said:
Many financial institutions issue no name or name of your choice debit/prepaid cards. It can increase your privacy.
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That privacy is effectively useless in a targeted investigation, if the issuer has performed KYC on you and has tied your identity to the card even if it isn't printed on the card or embedded in the stripe or chip.

But for small amounts, it might help.

So it depends on your risks and threats.
 
#13
Sols said:
That privacy is effectively useless in a targeted investigation, if the issuer has performed KYC on you and has tied your identity to the card even if it isn't printed on the card or embedded in the stripe or chip.

But for small amounts, it might help.

So it depends on your risks and threats.
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Yes definitely, that's why I said it can increase your privacy. It won't protect you 100%. If your country asks to the card issuer for information about the card number then your identity can reveal but it is a much more lengthy process than checking the cardholder's name that is already logged into the ATM machine.
 
#15
Jerry1911 said:
Ok I know all of this applies to Visa/Mastercard/Amex...but what about UnionPay? Do they comply with such requests?
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A raid like this doesn't require any assistance from the issuer if your name is on the card. Some "anonymous" cards have the cardholder's name embedded in the EMV or mag stripe. The authorities would just get it from the ATM or POS operators.

But let's say it's a proper anonymous card with no identification on it anywhere.

Visa and Mastercard are different from Amex. Amex issues cards directly to customers. If you get an Amex from your bank, you're actually getting it from Amex via your bank. Visa and Mastercard license other companies to issue.

China UnionPay operates on the same model as Visa and Mastercard (although in some cases they issue the cards themselves). This means you cannot rely on any non-compliance from China to release information. Your information would be obtained from whichever issuer gave you the card.
 
#20
Sols said:
Whenever you use your card, it leaves a long-lasting record of the transaction,
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exactly, however, if you don't have anything to hide, you may be fine to use your card anywhere.
 
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