Around 1 per cent of all current account applications are dodgy, according to new research. Financial information company Experian said money muling – where someone lets criminals use their bank account to move cash – is one of the main causes, accounting for 42 per cent of reported fraudulent accounts.
It said money mule accounts are often used for so-called authorised push payment (APP) fraud – where crooks trick people into transferring money to them. Experian said the cash can then be shifted between two and three others before being transferred overseas or to crypto wallets – then moved back into the UK financial system.
Eduardo Castro, managing director for identity and fraud at Experian UK and Ireland, said: “Many people don’t realise that acting as a money mule is illegal and carries the risk of prosecution.
“Mules, especially young people, can be tempted by offers advertised on social media sites to let their accounts be used with the promise of financial gain, but others are unwittingly duped into it by fraudsters.
“People need to think twice if they are approached and asked if money can be transferred, as it will almost certainly be fraudulent funds.”
Experian has launched a mule score initiative which analyses account opening history and turnover activity – comparing it with the characteristics of thousands of confirmed mule cases – to help banks and building societies identify, investigate and close fraudulent accounts.
The UK Government has also proposed a new fraud strategy which it hopes could cut fraud by 10 per cent by December 2024.
It said money mule networks play a significant and growing role in enabling fraud. In 2022, banks identified more than 39,000 accounts suspected of mule activity, and warned people who shared their accounts can be lured into crime through promises of low risk, easy cash.
A policy paper called “Fraud Strategy: stopping scams and protecting the public”, published last month states: “People are taken advantage of by criminals, and sometimes children are exploited in this way.
“We will disrupt this crucial money laundering technique and protect the public by delivering a co-ordinated response from government, regulators, law enforcement, industry and organisations working with young people.
“This will bring together campaigns and education to raise public awareness of the risks of getting involved, innovation by the financial sector to identify mule networks and freeze funds, law enforcement work to target the mule recruiters and controllers, and action by social media companies to close down recruitment routes, balancing deterrents and safeguarding for identified money mules.”
