Banks close thousands of ‘money mule’ accounts, MPs told

Banks are closing tens of thousands of accounts a year in the UK as fraudsters increasingly use social media to lure young people into becoming “money mules”, MPs have heard.

Santander said it closed about 24,000 accounts a year on suspicion of fraud. About 11,000 of those are suspected money mule cases, where fraudsters use genuine accounts to process illegal payments linked to terrorism, money laundering and other economic crimes.

Susan Allen, the head of retail business banking at Santander UK, told MPs on the Treasury select committee that young people were being targeted on social media.

The bank recently worked with Facebook to shut down adverts where fraudsters were offering people £1,200 in exchange for allowing their accounts to be used.

Allen said that often people did not understand the potential consequences of being a money mule, including difficulty in opening bank accounts and obtaining mortgages, other loans and credit cards, as well as prison sentences.

“Often the victims don’t understand the implications for them if their account is fraudulent and could be blocked from future banking facilities,” she said. “People don’t understand what it means … this is facilitating money laundering, economic crime, serious terrorism … we have to do a lot more on education.”

Santander’s research found that 85% of 18- to 25-year-olds had shared information online that made them vulnerable to being victims of scams. The bank hired Wes Nelson, a contestant on ITV’s Love Island, to record a video warning people against becoming easy prey for scammers. The video appeared on sites including Facebook and YouTube.

Nelson tells viewers: “If someone offers you cash to move money through your bank account, don’t do it. It might sound great but you’re actually being double mugged off.

“You’d be a money mule and you could go to prison for 14 years, ruin your chances of ever getting a loan or even a credit card, which would be a total fiasco. Listen: if it sounds too good to be true, it probably is.”

Chris Rhodes, the chief product and propositions officer of Nationwide, also appeared at the session on economic crime. He told MPs the building society closed about 12,000 accounts a year due to fraud, about half of which were associated with money muling.

“We’ve got a whole range of monitoring in place to try and close those accounts before they ever get used for that purpose,” Rhodes said.

Allen – who revealed she was a victim of identity theft last year – said that four in 10 of the 18- to 25-year-olds surveyed by Santander had shared their passwords with friends and family members. “We think of it as a digitally savvy population but we need to work with them and educate them,” she said.

UK Finance, the trade association for the banking industry, last year ran a campaign called “don’t be fooled” that was targeted specifically at university students, warning them that acting as a money mule was a criminal offence that could leave them locked out of the financial system.

Meanwhile Lloyds Banking Group formed a “mule hunting team” to spot some of the telltale signs and patterns of behaviour associated with mule accounts and to block them. The bank prevented more than £1m being transferred to fraudsters’ accounts in the first half of 2018 alone.