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

Why do certain ethnic groups use Collection Accounts?

1. To simplify transaction processes

2. For convenience and speed in financial transactions

3. To facilitate money laundering

4. For traditional practices in banking

The correct answer is: To facilitate money laundering

The use of collection accounts by certain ethnic groups can indeed be linked to the facilitation of money laundering activities. Collection accounts are often utilized to aggregate funds from various sources, making it simpler to transfer large sums without attracting regulatory scrutiny. This process can help obscure the origins of the money, making it difficult for financial institutions and law enforcement to trace the activities involved. In some cases, individuals might engage in this behavior to work around traditional banking systems that they feel may not meet their needs or that impose barriers due to legal or cultural reasons. Since these accounts can be manipulated to obscure the source of funds, they are sometimes exploited for illicit purposes. This option reflects some of the real risks associated with collection accounts in money laundering scenarios, highlighting how they can serve as tools for those looking to disguise the true nature of financial transactions.