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What is a money mule?

Helen Fox

By Helen Fox

With many people still struggling with the high cost of living in the UK, any opportunity to make quick and easy money is tempting. 

It is in part because of this that money mule schemes are spreading. In 2022, UK banks identified over 39,000 accounts showing behaviour typical of money mules. But, far from the quick way to make money that it seems, money muling is a serious criminal offence.

You could be lured into being a money mule without knowing it, and still end up with a criminal record if you're caught. So, follow tips from our in-house fraud expert on how to protect yourself from being recruited into these schemes, and what to do if you’ve been exploited by one. 

Money mule schemes are a kind of money laundering

A money mule is somebody who lets someone else use their bank account to transfer money. Criminals like fraudsters and drug dealers frequently use money mules to move, disguise, and conceal money they’ve made from illegal activities. In other words, money laundering. 

Money mules transfer illegally obtained money between bank accounts

In a money mule scheme, the person lending their bank account (the mule) will receive funds transferred to them by a criminal. This money could have come from any type of illegal activity. For example, it could be the proceeds of fraud, or profit from dealing drugs. 

The mule will then be asked to transfer this money to a different account or withdraw it and give it back to the criminal. As the funds are moved from account to account, it becomes harder to trace this back to the original crime. As a result, fraudsters can make the funds appear legitimate (or ‘clean’) and risk-free.  

Sometimes, mules may be asked to use the money to buy gift cards, cryptocurrency, or even gold. These things are popular with criminals as their use is often difficult to trace. 

As payment for allowing their account to be used, the mule will usually take a cut of the money that passes through their account. 

Students are a target

Criminals often target students and young people who tend to be strapped for cash and unaware that money muling (or ‘squaring’) is illegal. However, anyone can fall victim, no matter their age or occupation. 

Money mule recruiters might get to know you in person, over the phone, via email or on social media and then ask to borrow money as a favour. It may seem like an innocent request from a friend, but it could be suspicious - especially if they promise you money in return.  

For example, a housemate could ask to borrow cash from you while they wait for their student loan to come through. Or, if you’re an international student, someone could offer you a high foreign exchange rate. 

Money mules are often recruited through fake job adverts and social media

Money mule recruiters typically use fake job adverts or social media to find people to move money for them. They launder money by asking job applicants to supply their bank details so they can pay their ‘wage’. Then they’ll overpay on purpose and ask for some of the money back.  

They may present the money mule scheme as an easy, well-paid job that you can do from home, or simply as a one-off way to make cash quickly. 

You could also be approached in person by someone you know, like a friend or family member, or even by a stranger on the street. This person may be a money mule themselves and have been told to recruit more people by the criminal that recruited them. As with fake job adverts or social media posts, they may bring up the idea as an opportunity for you to make some quick money. 

The consequences of money muling can be severe

People who become money mules are often unaware they’re breaking the law. But money muling is a type of money laundering, which is a criminal offence.  

Even if you don’t know what the money is being used for, you could face severe consequences if you’re caught and prosecuted. Financial consequences include losing access to your bank account, not being able to open a new one, and not being able to borrow money if you need to. In the most serious cases, you may face having a criminal record, or a prison sentence. 

How to protect yourself from money mule schemes 

We spoke to our in-house fraud expert, Ben Fleming, about the best ways to identify and avoid money mule schemes. Here are his top tips: 

Watch out for job ads offering high pay for little work

A dead giveaway of a money mule scheme is a job advert that promises high pay for what seems to be very little or easy work. But they’re not always so simple to spot. Here are some of the other signs a job opportunity may not be all it’s cracked up to be: 

  • The employer may say they are an overseas company looking for ‘local representatives’ to act on their behalf.
  • The job advert doesn’t describe the specific responsibilities of the job. Or, if it does, it mentions transferring money or goods.
  • It’s described as a completely online job that you can do from home.
  • There’s no interview process, and you’re offered the job as soon as you apply. 

Before applying for a job, make sure you research the company thoroughly. Check if they’re listed on Companies House and if they have genuine contact details on a trusted website. 

Beware of social media posts promising “instant cash”

Keep an eye out for social media posts offering opportunities to make “same-day cash” that’s “100% guaranteed”. These posts may also include how much others have made as a tactic to lure you in. But these opportunities could be scams or money mule schemes. 

Keep your bank and personal information private

Information like your bank account details, card details, or online banking login is best kept private. Even if you know and trust someone and they have a good reason to send you money, there are plenty of ways to do it that don’t involve sharing private details. You could use PayPal, for example. Or many banks now allow you to send people a link or QR code that they can use to pay you. 

Remember, if it sounds too good to be true, it probably is

This is the golden rule of spotting any kind of scam or fraud. There’s likely to be a catch to any opportunity that offers you the chance to make a lot of money for very little work or no prior experience. In this case, it’s breaking the law. 

We spoke to our in-house fraud expert, Ben Fleming, about some of the common ways that individuals are tricked into becoming a money mule. Ben says: 

We’ve seen a lot of individuals that have fallen victim to money muling without knowing. It’s a fairly common occurrence in internet dating, where an individual will receive money from their internet partner, and have an accidental “large” amount put in.

When they want a portion returning, they give them new details to transfer it to. Because the scammer never asks the individual for money, and is in fact giving them money, they don’t realise it’s a scam.  

Social media, especially Snapchat, is a common platform for money muling. Scammers post offers to buy bank accounts and sometimes request individuals to run credit checks to determine their value.

They may pressure people with a good credit history to take out credit and use laundered money to pay it off. Young people often fall victim to these schemes because they are unaware of the risks involved. 

Reporting a money mule scheme

If you suspect you’ve seen a money mule scheme advertised on a job board or social media platform, report it to the platform you saw it on. They will then investigate and pass any relevant information on to the police. 

What to do if you’re approached to be a money mule

In some cases, someone may approach you in person and ask you to become a money mule. It may not be obvious, especially if you’re approached by somebody you know and trust.  

If you suspect that an opportunity you’re offered is actually a money mule scheme, you should: 

  • Decline politely, or say you need to think about it. 
  • Report it to the police by calling 101. If you know the person, you’ll probably need to share their details (don’t worry, the police can keep you anonymous). If you don’t, a description of where you were when you were approached may help the police to track them down. 
  • If you’re in immediate danger, call 999. If the person is aggressive or threatening, call the emergency services for help. 

What to do if you think you’ve become a money mule

If you think you are or have been involved in a money mule scheme, don’t panic. You should: 

  • Stop transferring money immediately
  • Notify your bank or the payment provider you’ve been using.
  • Report it to the police by calling 101.

And remember, if you or someone else is in immediate danger, call 999 for help. 

By coming forward, you could help to prevent other people from becoming money mules. You may even be able to play a part in catching the criminals and putting an end to this money mule scheme. 

Sources 

Disclaimer: We make every effort to ensure content is correct when published. Information on this website doesn't constitute financial advice, and we aren't responsible for the content of any external sites.

Helen Fox

Helen Fox

Personal Finance Editor

Helen is a personal finance editor who’s spent 11 years (and counting!) in the finance industry. She creates content on everything money with the goal of getting people thinking – and talking – about their finances in ways they may not have done before.

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