The Royal United Services Institute’s report has warned that the scale of bank fraud and money mules in the UK should be considered a national security threat.
Following this announcement, the report has found that there are multiple sophisticated techniques and weak crime controls across the overall UK financial system, which have allowed droves of money mules to operate across the nation.
In addition, it was also mentioned that criminals use money mules in order to launder profits of crimes, as well as `rinse` the funds by passing them through a legitimate bank account. This money often originates from scams and fraudulent initiatives.
More information on the Royal United Services Institute’s report findings
According to the publication, the cost-of-living crisis is likely to have pulled more individuals into the money mule net, as multiple households desperately search for quick ways to make cash. At the same time, many money mules are unaware they are effectively laundering money, as the process is often set up as a fake job advertisement online.
However, mules involved in money laundering, which represents a process that often sees them paid just a few hundred pounds by the criminals, can face a 14-year prison sentence if caught. Once the process is done, the money gets into a mule's account, and it is rapidly transferred elsewhere in order to make it harder for authorities to track it down. In addition, more than half of the funds received into money mule accounts are usually moved within an hour, while almost 28% leave the account within just 15 minutes.
The scale and the overall extent of fraud in the region of the UK is currently so vast that it may be seen as a national security threat, undermining the rule of law while also threatening the financial sector. In particular, the rise of authorised push payment (APP) fraud has also attracted considerable attention over the past decade, as APP fraud occurs when an individual is tricked into making a payment to a fraudster whom they think is a genuine payee. In many cases, the individuals are making a payment into an account that is operated by a money mule and controlled by the fraudster.
Rusi also probed the current payment systems in the region of the UK and found that newer digital banks with weaker financial crime controls are being disproportionately exploited by fraudsters and money mules. These newer financial institutions and payment providers receive a disproportionate share of transactions from known money mules as crooks exploit the weaker crime prevention systems in these companies.
Furthermore, the report was launched after it was revealed that the number of money mules in the UK jumped 23% in just one year, as around 225,000 people have been identified as money mules, with their accounts being used by fraudsters to launder funds in 2024.
