Video: Police scanners can now freeze prepaid cards


Controversy has erupted over a technology that allows law enforcement officials to immediately freeze and later seize funds found on prepaid cards in suspects’ vehicles. “The IRS has called prepaid cards the currency of criminals,” says Jack Williams, founder of ERAD.

ERAD is the company that sells law enforcement the software to take on the road. He says the technology allows officers to do with cards what they currently do with cash when they pull someone over with probable cause: Seize the money and get a court order to keep it. “Prepaid cards is the currency of the global criminal. Right now they function with impunity. ERAD’s purpose is to provide law enforcement with a tool to counter that impunity they’ve enjoyed,” says Williams.

In Oklahoma where the controversy began, opponents worried that law enforcement agencies could more than just freeze funds on prepaid cards, but rather access routing and account numbers on credit and debit cards they found. Williams denies his technology has the ability to access any information that isn’t already found on the front and back of a credit card. But he says if criminals hide stolen credit card information on the mag stripe of even a hotel room key, officers can now detect the fraud within seconds. “The largest single arrest was 16,803 cards for a total value of $2.1 million,” he says.

However, civil rights activists argue that it’s not just criminals who carry around prepaid or stored-value cards. “Here in Oklahoma, many state agencies now dole out state benefits, student loan payments and even child support payments specifically on stored-value cards,” says Brady Henderson with the ACLU of Oklahoma.

The ACLU worries if law enforcement has this power, they may abuse it - especially since the agencies get to keep money they seize. “What often can happen is police forces that are strapped for cash start thinking less about the investigation, less about the actual law enforcement mission and more about how to obtain funds from it,” says Henderson.

After the uproar, the Governor of Oklahoma temporarily suspended the use of ERAD scanners on the road. But, that doesn’t worry Williams, who says more than 300 jurisdictions across the country are now using his technology. In a world where cash was once king, cards are becoming the currency of choice – and Williams believes these scanners are the only way troopers can stop the flow of criminal funds.

See related: Prepaid debit cards: With all the scams, are they worth it?, Credit card fraud and ID theft statistics, 9 things you need to know about prepaid cards

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Updated: 02-22-2019