With many people still struggling with the high cost of living in the UK, any opportunity to make quick and easy money is tempting.
It is in part because of this that money mule schemes are spreading. In 2022, UK banks identified over 39,000 accounts showing behaviour typical of money mules. But, far from the quick way to make money that it seems, money muling is a serious criminal offence.
You could be lured into being a money mule without knowing it, and still end up with a criminal record if you're caught. So, follow tips from our in-house fraud expert on how to protect yourself from being recruited into these schemes, and what to do if you’ve been exploited by one.
A money mule is somebody who lets someone else use their bank account to transfer money. Criminals like fraudsters and drug dealers frequently use money mules to move, disguise, and conceal money they’ve made from illegal activities. In other words, money laundering.
In a money mule scheme, the person lending their bank account (the mule) will receive funds transferred to them by a criminal. This money could have come from any type of illegal activity. For example, it could be the proceeds of fraud, or profit from dealing drugs.
The mule will then be asked to transfer this money to a different account or withdraw it and give it back to the criminal. As the funds are moved from account to account, it becomes harder to trace this back to the original crime. As a result, fraudsters can make the funds appear legitimate (or ‘clean’) and risk-free.
Sometimes, mules may be asked to use the money to buy gift cards, cryptocurrency, or even gold. These things are popular with criminals as their use is often difficult to trace.
As payment for allowing their account to be used, the mule will usually take a cut of the money that passes through their account.
Criminals often target students and young people who tend to be strapped for cash and unaware that money muling (or ‘squaring’) is illegal. However, anyone can fall victim, no matter their age or occupation.
Money mule recruiters might get to know you in person, over the phone, via email or on social media and then ask to borrow money as a favour. It may seem like an innocent request from a friend, but it could be suspicious - especially if they promise you money in return.
For example, a housemate could ask to borrow cash from you while they wait for their student loan to come through. Or, if you’re an international student, someone could offer you a high foreign exchange rate.
Money mule recruiters typically use fake job adverts or social media to find people to move money for them. They launder money by asking job applicants to supply their bank details so they can pay their ‘wage’. Then they’ll overpay on purpose and ask for some of the money back.
They may present the money mule scheme as an easy, well-paid job that you can do from home, or simply as a one-off way to make cash quickly.
You could also be approached in person by someone you know, like a friend or family member, or even by a stranger on the street. This person may be a money mule themselves and have been told to recruit more people by the criminal that recruited them. As with fake job adverts or social media posts, they may bring up the idea as an opportunity for you to make some quick money.
Even if you don’t know what the money is being used for, you could face severe consequences if you’re caught and prosecuted. Financial consequences include losing access to your bank account, not being able to open a new one, and not being able to borrow money if you need to. In the most serious cases, you may face having a criminal record, or a prison sentence.
We spoke to our in-house fraud expert, Ben Fleming, about the best ways to identify and avoid money mule schemes. Here are his top tips:
Before applying for a job, make sure you research the company thoroughly. Check if they’re listed on Companies House and if they have genuine contact details on a trusted website.
This is the golden rule of spotting any kind of scam or fraud. There’s likely to be a catch to any opportunity that offers you the chance to make a lot of money for very little work or no prior experience. In this case, it’s breaking the law.
We spoke to our in-house fraud expert, Ben Fleming, about some of the common ways that individuals are tricked into becoming a money mule. Ben says:
We’ve seen a lot of individuals that have fallen victim to money muling without knowing. It’s a fairly common occurrence in internet dating, where an individual will receive money from their internet partner, and have an accidental “large” amount put in.
When they want a portion returning, they give them new details to transfer it to. Because the scammer never asks the individual for money, and is in fact giving them money, they don’t realise it’s a scam.
Social media, especially Snapchat, is a common platform for money muling. Scammers post offers to buy bank accounts and sometimes request individuals to run credit checks to determine their value.
They may pressure people with a good credit history to take out credit and use laundered money to pay it off. Young people often fall victim to these schemes because they are unaware of the risks involved.
In some cases, someone may approach you in person and ask you to become a money mule. It may not be obvious, especially if you’re approached by somebody you know and trust.
If you suspect that an opportunity you’re offered is actually a money mule scheme, you should:
And remember, if you or someone else is in immediate danger, call 999 for help.
By coming forward, you could help to prevent other people from becoming money mules. You may even be able to play a part in catching the criminals and putting an end to this money mule scheme.
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Disclaimer: We make every effort to ensure that content is correct at the time of publication. Please note that information published on this website does not constitute financial advice, and we aren’t responsible for the content of any external sites.
Helen is a personal finance editor who’s spent 11 years (and counting!) in the finance industry. She creates content on everything money with the goal of getting people thinking – and talking – about their finances in ways they may not have done before.
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