The scale of bank fraud and money mules across Britain is so vast it should be considered a national security threat, a leading think tank warns.
A report from the Royal United Services Institute (Rusi) has found sophisticated techniques and weak crime controls across the financial system has allowed droves of money mules to operate across the nation.
Criminals use money mules to launder profits of crimes and ‘rinse’ the money by passing it through a legitimate bank account.
This money often originates from fraud or scams, or sometimes drug dealing and people trafficking.
The cost-of-living crisis is likely to have pulled more people into the money mule net as households desperately search for quick ways to make cash.
Many money mules are unaware they are effectively laundering money as it is often set up as a fake job advertisement online.
Target: Students are often tricked into becoming money mules with the promise of easy cash
Crooks typically make promises of ‘easy cash’ and ‘cash-flipping opportunities’ when recruiting mules.
Often cash-strapped students are the target, with recent data from Nationwide Building Society suggesting three in 10 are exposed to money mule scams every week, through social media.
But mules involved in money laundering – which often sees them paid just a few hundred pounds from the criminals – can face a 14-year prison sentence if caught.
Once money gets into a money mule’s account it is rapidly transferred elsewhere to make it harder for authorities to track it down.
More than half of the funds received into money mule accounts left within an hour, research from Rusi, a think tank specialising in security, shows.
Almost 28 per cent left the account within just 15 minutes, outpacing efforts by authorities to crackdown on the crime.
Kathryn Westmore and Alison Owen, who penned the report, said: ‘The scale and extent of fraud in the UK is so vast that it may reasonably be seen as a national security threat, undermining the rule of law and threatening the UK’s financial sector.
‘In particular, the rise of authorised push payment (APP) fraud has attracted considerable attention over the past decade. An APP fraud occurs when an individual is tricked into making a payment to a fraudster who they think is a genuine payee.
‘In many cases, they make a payment into an account operated by a so-called money mule and controlled by the fraudster.’
Rusi also probed the current payment systems in the UK and found newer digital banks with weaker financial crime controls are being ‘disproportionately exploited’ by fraudsters and money mules.
These newer financial firms and payment providers receive a disproportionate share of transactions from known money mules as crooks exploit the weaker crime prevention systems in these companies.
The report comes just days after it was revealed the number of money mules in the UK jumped 23 per cent in just one year.
Some 225,000 people have been identified as money mules as their accounts were used by fraudsters to launder funds in 2024.
The surge in mules has raised alarm bells at watchdog the Financial Conduct Authority, which ‘recognises the scale of the challenge’.
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