Money launderers seem to be ramping up their use of a favorite strategy to clean their illegal funds — paying a small fee to a bank account holder to simply receive and send money transfers. And these so-called money mules are starting young.

Hiring a money mule is a bit like renting a magic money box, where the dirty money goes into their account and, a moment later, it is yanked out squeaky clean. In fact, fraud conducted by the genuine bank account holder is on the rise, and an increase in young "money mules" is largely to blame, according to Cifas’ recent Fraudscape report.

The money mule target audience seems to be evolving, with herders trying to recruit money mules as young as fourteen. According to Cifas’ latest report, young people are most at risk with a 27% increase in 14- to 24-year-olds carrying out this type of fraud.

While a money mule uses the account to process and transfer illegally obtained funds, a herder’s job is that of recruitment — that is finding, training and rewarding the mules. In fact, money mules are responsible for eight out of ten account misuse fraud reports, reports Cifas.

These findings seem to underline that money muling is still a problem for U.K. banks, despite reports of money launderers moving to cryptocurrency ruses. Perhaps it is just a case of some herders looking for any angle possible to clean illicit funds.

Herders can either target individuals as events or via social networks to seek out their prey. Lines such as “Have you ever held two thousand dollars at once in your hand?” have reportedly been used to lure in young money mules.

In some cases, the account holder will be aware — or at least have an inkling — that they’ll be assisting in the obfuscation of a dirty-money trail, but do we really expect bank account holders as young as 14 to spot the signs?

Surely, sophisticated social engineering techniques would be employed by the herders, who may themselves be money mules with an incentive to trick others into joining the scam.

Cifas’ report says that images and videos featuring young people enjoying a high-end lifestyle are being used to snag new mules, and that seven out of 10 cases where a money laundering scam was identified, the mule account holder was male.

The penalties for getting caught as a money mule are more like a punch in the face than a light tap on the wrist.

“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," said Katy Worobec, head of fraud and financial crime prevention at UK Finance.

This is an ongoing battle. Last November, Worobec warned that money mules could face up to fourteen years in jail if caught.

If these consequences were promoted more widely, perhaps it would help the potential money mules resist the herders’ sweet whispers of risk-free riches in exchange for illegally subletting their bank accounts.

Cifas, it seems, agrees and has recently partnered with the PSHE Association to create education plans aimed at helping students spot this scam and understand the consequences.

The number of overall fraud incidents affecting bank accounts decreased a single percentage point in 2017. Cifas attributes the change to banks improving security and technology, such as voice recognition software, to identify and stop individuals opening accounts in another name.

“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 also 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,” said Worobec.

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Carole Theriault

Carole is a technology, information security and privacy writer and commentator. She founded U.K. firm Tick Tock Social in 2011 to provide IT communications expertise and services to organizations around the world.