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“Would you like to make some extra money working from home?”

If you’re young, gifted and broke, the ping of a social media message offering the chance to make “same-day cash” could be tempting.

FT podcast: The dangers of being a ‘money mule’

How an offer of easy money can end up as a criminal offence involving money laundering. Listen here

This is what happened to 19-year-old Henry, who listens to my Money Clinic podcast. He and his friends were repeatedly targeted with these kinds of messages via Snapchat and Instagram. If they responded, the students were typically told they’d be working as a “transfer agent” or “local representative” for an overseas company.

One offered to pay £3,000 into Henry’s bank account, letting him keep £300 if he transferred £2,700 online into a separate account at a different bank. Easy money — and something that’s possible to do within seconds on banking apps.

Thankfully, Henry sensed it was “dodgy” — but he contacted me as he wanted to know where the money was coming from, and where it was going.

As I reveal on the podcast this week, the answer is laundering the proceeds of online fraud, which has risen to record levels during the pandemic.

Henry had just avoided becoming a “money mule” — stooges who allow their bank accounts to be used to pass on the proceeds of organised crime.

Fraudsters known as “herders” recruit money mules, creating vast webs of linked online accounts. This enables stolen money to pass swiftly through multiple banks, often via different countries, before the criminals cash out the proceeds — making it virtually impossible to trace.

Accepting that £300 could have cost Henry dearly.

The stolen money may have passed through his bank account in a matter of minutes, but in the eyes of the law, it counts as money laundering — a criminal offence with a maximum sentence of 14 years.

Even though money mules are rarely involved in the underlying fraud, they’re a vital part of the process — and the ones who carry the highest risk of being caught, as they use their own bank accounts.

“You can become a money mule without ever realising it, and still be prosecuted for doing it,” says Tony Sales, a reformed fraudster who founded the crime prevention consultancy We Fight Fraud.

He tells me that criminals are purposefully recruiting young, middle-class university students to do their dirty work “because they know they’re honest” and can be trusted to pass on the stolen cash rather than pocketing it all. Plus, students are cash hungry, as lockdown restrictions have squeezed any income from part-time jobs.

Last year in the UK, criminals stole over £1.2bn through fraud and scams according to UK Finance, the banking industry body. However, bank security systems prevented a further £1.8bn of scam attempts.

“It’s a volumes game for the fraudsters — the more mules they have, the more fraud they can complete,” says Mike Nathan, a senior director at Lexis Nexis Risk Solutions, which designs software that helps banks spot suspicious transactions.

Mules can earn extra cash by opening multiple bank accounts in their own names and passing stolen money through those. But Mr Nathan warns: “Even if you’re opening an account online, you’re easy to catch — you will have had to scan in your passport and send other ID.”

If banks suspect fraud, they can freeze and close accounts without warning. Mr Nathan says that even if mules avoid a criminal conviction or fine, they could have trouble opening a bank account in future, and may struggle to obtain credit including mobile phone contracts, credit cards or even a mortgage.

Rising fraud during the pandemic means more mules are being recruited to launder the proceeds. Mr Sales says criminals know many older consumers are trying online banking for the first time, and can be tricked into transferring money into a “safe” account.

Fraudulent applications for government support schemes such as Bounce Back Loans are estimated to run into billions of pounds and the rise of online shopping has caused UK payment fraud to surge.

Scam calls jumped by 59 per cent between April and October, according to research this week by Truecaller, the spam-blocking app.

These include calls from fraudsters posing as contact tracers, claiming you have come into contact with a person who has tested positive for Covid-19. To get their own test, victims are persuaded to verify their identity and share personal information including their date of birth, address and email. At the end of the call, they’re asked to pay for their test, giving their payment card details — handing the criminals enough information to defraud them.

As well as exploiting our fears, fraudsters also exploit our greed. Investment fraud rose by 27 per cent in the first half of the year, and is yet another area where Henry and his friends have been targeted on social media.

After responding to one investment “opportunity”, Henry found himself on a Zoom call with 50 other people, many claiming to be “forex traders” wearing suits and headsets.

The sales pitch claimed investors could generate a “passive income” of up to £10,000 a month trading currencies and crypto. Henry logged off when he was asked to pay £90 per month for a tip sheet sending signals of what to buy and when, sensing it was too good to be true.

But not everyone is as savvy as Henry. The growing sophistication of online fraud and attempts to persuade young people to help launder the proceeds are a huge worry for families and financial institutions alike.

Fraud prevention agencies around the world have a simple message for those on the receiving end of a scam attempt or dodgy job offer — report it. In the UK, Action Fraud has an online reporting tool, and social media platforms have been pressured into beefing up their own internal reporting procedures, making it easy to report suspect messages or accounts with a couple of clicks.

This Christmas, please talk to your children and younger relatives about the dangers of “muling”, the crimes it makes possible and what they should do if it happens to them. Yes, it might be a bit of an awkward conversation — but it will be far less awkward than seeing them end up with a criminal record.

Claer Barrett is the FT’s consumer editor, and a financial commentator on Eddie Mair’s LBC drive-time show, on weekdays between 4-7pm: claer.barrett@ft.com; Twitter @Claerb; Instagram @Claerb

If you would like to be a guest on the Money Clinic podcast, please email the Money Clinic team with a brief description of your story — our address is money@ft.com

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