Money Muling

5th Jan 2021

When an online offer sounds too good to be true…

don’t become a link in the money laundering chain

Protect your friends by sharing this article with them:

We’ve all heard stories of Brits abroad caught smuggling drugs who claim that a new friend had “duped them into carrying the wooden elephant through customs” and that they were an innocent victim tricked by their own kindness. “How could they have been so naive?” we will have wondered aloud.

There is a growing online trend – that follows a similar pattern – called Money Muling and we want IPS members to be aware of it, so that the same comment is never directed at you. Money Muling is the process where a person knowingly – or unknowingly – receives money from one source and then transfers money from his/her account to another destination account which will often be in another country. The scam is also known as ‘squaring’ but is a modern incarnation of money laundering. The knowing participant may retain a sliver of commission but the lasting damage to their financial health may be far more costly.

In early December 2020, Europol launched a campaign called #DontBeaMule with this video explaining the story in 60 seconds.  The UK is part of this effort to fight Cybercrime (We will share any updates in 2021 if that changes).

Criminals are always looking for new ways to clean their money and make it hard for authorities to trace it. For those who have already made gains from phishing scams, ransomware and identity fraud, Money Muling is a logical step (using similar tactics) to hide their money.

Criminals typically target younger people and students to be their money mules as they are often short of cash, in debt and have clean financial histories (so they are of little interest to government financial fraud investigators). The number of under 21s involved has tripled in the past three years according to Barclays Bank.

Ireland’s FraudSMART  recently reported “36 per cent of the 18 to 24-year-olds in the country had acted as money mules this year alone, laundering €12m (£10.8m) since the start of 2020 in return for a small fee”. The research revealed, as in the UK, that nearly half of those involved had ever heard the term “money mule” before and few understood the risks they were taking.

As figures emerge from other countries, the global flow of illegal transfers adds up to a massive financial challenge. Awareness campaigns to date have focused on the youngest of adults, but UK fraud prevention service CIFAS, has warned of a growing trend where older adults are being targeted. Money muling activity was up by a quarter among 41 to 60-year-olds last year,  as fraudsters turn away from increasingly aware and digitally savvy younger targets who have heard of friends getting into trouble this way. Under 40s are still responsible for more than 80 per cent of the incidents in the UK, but the number has plateaued and is dropping among the under 21s.

How victims are targeted

Social media is the perfect place to find people interested in “risk-free guaranteed cash” or “same day money” through some simple sounding adverts or short-term job offers.  These “jobs” require very few skills beyond the mention of being a “local agent” for an international company involved in transferring goods or money.  The company itself may well exist, but the contact details the victims receives will invariably involve a Gmail, Yahoo or Hotmail address and a personal mobile number which have nothing to do with the company named as the sponsor. Common arguments to convince the victims involve “discretion and speed” (the hallmarks of a scam) and how much money others have made recently who did what they were told.

The downside

Once authorities suspect money muling is happening through a personal account the downside can be devastating. The police may well press charges for criminal activity leaving victims with a criminal record, a fine or even possible imprisonment. The bank will be minded to close the account and lose a customer who will also have their credit rating damaged and their name put on a banking watchlist that may make it difficult to open another account elsewhere.

A summary of these downside risks would include:

  • Your bank account will be closed and, more often than not, you will be unable to open another one
  • You will find it harder to obtain loans
  • It will be difficult to get a mobile phone contract
  • You will have problems applying for credit
  • You and your family could be threatened with violence should you decide to stop money muling
  • You could go to prison whether you are an unsuspecting victim or not.

Please remember this list if you, or anyone you know, is every tempted to make some “quick cash”. Anyone caught money muling is left facing nightmare challenges to open a bank account, to receive their salary or take out a loan to buy a house – and they might upset some serious criminals having helped out for a while.

 

A final word from UK Finance’s Katy Worobec, Managing Director of Economic Crime who says:

“The banking industry is working closely with law enforcement to identify, arrest and charge those criminal gangs responsible for recruiting money mules and to raise awareness amongst susceptible groups. Banks have sophisticated systems in place to detect suspicious transactions, and when they identify a money mule account it will be closed and reported to the authorities.
Letting your bank account be used to transfer money given to you by someone else makes you a money mule, and when you’re caught your bank account will be closed and you will find it difficult to open an account elsewhere. Through our Don’t Be Fooled campaign, we’re urging people not to give their bank account details to anyone unless they know and trust them, and to remember that if an offer of easy money sounds too good to be true, it probably is.”

 

IPS Summary

  • Do not respond to job adverts or social media posts which promise large amounts of money for very little work
  • Do not allow a brand new employer or a stranger to use your bank account to transfer money
  • Thoroughly research any potential employer, particularly one from overseas, and call them through their main switchboard to confirm the details are all correct
  • Be aware that no legitimate company will ask you to use your account in order to transfer money
  • Never give your financial details to someone you do not know well enough to trust
We must act together to protect ourselves, our families and our friends
Please share this article to spread awareness of this issue.

Have your say

As an IPS member, you can leave us your thoughts, comments and experiences in the commments section below

2 Responses

  1. sarah.spenser@protonmail.com Spenser says:

    Money Muling is a dangerous trick done by criminals. People should be more aware of this. And they inform the police when they will observe any doubtful occurrence.

    https://debtadvices.co.uk/

  2. Hilary Canto says:

    Does this not support the case for keeping cash as an option for purchasing offline?
    The financial sector is pushing more and more to have electronic money and make us a cashless society. Therefore Personal data and personal money is at risk from these practices of online money organisations and also no one seems to have thought about the fact that with the climate crisis if electronic systems go down everyone will have no money to care for themselves.
    I urge us all to keep some cash safe and to be very careful with bank information and look carefully at any emails, letters or flyers that could be copying the real organisation.
    My sister lost money to a holiday company scam using similar practices to the above which was very clever at making it look like the real company she thought she was booking through and because she paid with a debit card from her bank she lost £1000 all she saved. Only credit card use can reimburse you in these circumstances, so any kind of cash transaction being asked for by these methods must be carefully scrutinised and checked.
    Thanks again IPS for bringing these to our attention and helping us go forward.

Leave a Reply

You must be logged in to post a comment.