Certified Anti-Money Laundering Specialist Certification (CAMS) Practice Exam

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How does one 'front-end load' a credit card?

  1. By paying off existing debts

  2. By overpaying the account with dirty money

  3. By taking cash advances

  4. By transferring balances from other cards

The correct answer is: By overpaying the account with dirty money

Front-end loading a credit card refers to the practice of making significantly larger payments to the card account than required, typically using illicit funds, such as money obtained through illegal activities. This technique aims to create a seemingly legitimate financial history for the cardholder, masking the source of the funds. By overpaying the account with "dirty money," the individual effectively integrates these illegal funds into the traditional financial system without raising immediate suspicion. In this context, overpaying the credit card account serves to obscure the origin of the funds while giving the appearance of responsible financial behavior. This practice can facilitate money laundering by allowing the individual to later withdraw or use the credit that has been artificially inflated by the overpayments. Other choices presented do not align with this definition; they primarily involve legitimate financial practices or techniques that do not inherently conceal the origins of money.

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