When he accidentally became a money mule, “Tom” was only fourteen. A friend transferred him 250£ and asked to withdraw them in cash. Days later “Tom”’s bank closed his account, and he hasn’t been able to open a new one anywhere since.
He is now sixteen and believes he has a Cifas marker – meaning he’s on the “black list” of banks since he unwittingly became a fraud transfer. “I just really wish the system wasn’t like this, as the people who know how to manipulate you will never get caught, it’s only the victims”, he says.
This activity is called money muling, and it has moved to the digital world. Social networks like TikTok are now full to the brim of posts promising young people quick ways to make cash.
Teens get in contact with the people behind the accounts, who explain how it works: they will send a set amount of money, let’s say £10,000. All the money mule will have to do will be transferring £9,000 to another account, and they’ll be able to keep £1,000 to themselves. By doing this, they commit a criminal offence.
Money mules are transfers for fraudulent funds. In the world of digital crimes, their job seems one of the easiest. Many young people are jumping on the bandwagon: data shared with City A.M. by fraud prevention service Cifas show that the number of accounts filed to their database bearing the hallmarks of money mule activity is on the rise. There were 7,033 reported cases of under 21 years old filed in 2021 compared to 3,962 in 2020.
Amber Burridge, head of fraud intelligence at Cifas, notes how during lockdowns social networks like TikTok grew in popularity. “Criminals are like marketers: they sniffed this opportunity and tried to make the most out of it, luring more people in through social media”, she says. Additionally, Cifas research shows that British people think money muling is the second “most reasonable” type of fraud. If scammers – also called “mule herders” – sell it well, you almost forget what you’re doing is criminal.
A quick visit to The Student Room platform, however, uncovers a bottomless well. The number of teens asking for advice after operating as money mules is huge. “I’ve been blacklisted and can’t get accepted by any UK bank. What should I do? Please help, I’m 16 years old and I have done fraud not knowing what I was getting into. Is my life ruined?”, asks someone. One answer goes “Your financials will be messed up now. You gave your details away willingly and they have decided you are a risk, which you are”.
Financial institutions are taking action to prevent these fraudulent transactions. A big part of their strategy is to work with software providers like LexisNexis Risk Solutions. Its solutions director, Dan Holmes, warns that the most vulnerable customers are not always the older, less tech-savvy ones. “Young people have grown up in a culture where it’s just normal to share their data online, so they give less thought when they’re asked to input details or facilitate muling”.
The big elephant in the room is social media. A National Crime Agency spokesperson politely remarks these companies should “apply the same level of attention to fraud and money laundering prevention as they do to other aspects of their businesses”. Less politely, this can be interpreted as: TikTok and the like, please get a grip.
Asked about money muling ads, a TikTok spokesperson says that “content that attempts to financially harm our community goes against our values”. TikTok is part of initiatives trying to combat fraud, including the Online Fraud Steering Group. After being contacted by City A.M., the firm took steps to remove the flagged posts.
The moderation of financial posts on TikTok sits aside current complaints about social media firms’ willingness to tackle online hate and abuse. Facebook is the firm taking the most immediate flak after whistleblower Frances Haugen revealed a host of international dissent towards the firm’s deletion policies.
Worse may be to come, as fraudsters head into new territory. Chris Boyd, lead malware intelligence analyst at Malwarebytes, warns that mule herders are now diversifying and opting for cryptocurrency transfers, a sign that this seven-headed beast is expanding. The financial regulator last week warned of influencer posts pushing people towards unregulated cryptocurrencies on social media. Silicon Valley is under the microscope.