The Royal United Services Institute’s report has highlighted that the scale of bank fraud and money mules in the UK should be viewed as a national security concern.

Findings on Weak Crime Controls and Sophisticated Techniques

The report reveals that there are numerous sophisticated methods and inadequate crime prevention measures across the entire UK financial system, enabling many money mules to operate nationwide. These techniques facilitate the laundering of illicit profits through legitimate bank accounts.

Criminals often use money mules to clean the proceeds from crimes, including those from scams and fraudulent activities. The process involves transferring funds into a seemingly legitimate account before quickly moving them to obscure locations to make it difficult for law enforcement to trace them.

Impact of the Cost-of-Living Crisis

The Royal United Services Institute points out that the current economic situation, characterized by rising costs and financial strain, has likely led more people to become involved in money mule activities. Many individuals may not realize they are helping to launder money when responding to fake job ads online.

Those participating in money laundering can face severe penalties, including a 14-year prison sentence upon conviction. Typically, the funds move quickly from these accounts—over half within an hour and nearly 28% within just 15 minutes.

National Security Threat and APP Fraud

The extent of fraud in the UK is so significant that it could be deemed a national security issue, jeopardizing the rule of law and threatening financial stability.

A particular focus is on authorised push payment (APP) fraud, which has gained considerable attention. APP fraud happens when an individual mistakenly transfers money to a fraudster posing as a legitimate recipient. Often, the transaction goes through a money mule’s account controlled by the fraudster.

Newer Digital Banks and Fraud Exploitation

The report further notes that newer digital banks with less robust crime prevention measures are disproportionately targeted by fraudsters. These financial institutions receive an unusually high percentage of transactions from known money mules, as criminals exploit their weaker security systems.

Rise in Money Mule Activity

In 2024, the number of identified money mules in the UK increased by 23%, with approximately 225,000 people participating in these activities. Their accounts are frequently used by fraudsters to launder funds.