Thousands risk jail as 'money mules'

Misusing banking and credit facilities is on the rise, despite the threat of a 14 year jail term.

Thousands are risking serious consequences by committing misuse of facility fraud, prevention teams have warned. (Met Police)

As the pressures of Christmas spending and the lean weeks of January loom, police and fraud prevention organisations are warning banking customers that misusing their credit arrangements could lead to a huge prison term and destroy their financial futures. And yet the numbers being tempted into serious crime are on the rise.

In the first nine months of 2016, almost 40,000 adults under 30 committed misuse of facility frauds, accounting for more than half of this kind of crime in the UK, according to fraud prevention service Cifas. That compares with just under 28,000 cases committed by 31-50 year olds. However, the number of cases is increasing fastest among older banking customers, with almost 1,600 new cases among 31-50 year olds compared with under 1,000 for the under 30s.

“Misuse of facility” fraud is where an account, policy or product is misused by the genuine account holder. The most common example is when an individual allows their bank account to be used to facilitate the movement of criminal funds. Often described as a “money mule”, individuals commit fraud by moving money through their own account and then to a third party, who is usually located in another country.

Other examples include selling your bank account, knowingly making a payment that will bounce, or opening credit card, retail accounts or mobile phone contracts when you have no intention of honouring the credit agreements.

With Christmas only a week away we want to warn young people, in particular students, to be wary of anyone approaching them in the student union or elsewhere with promises of cash for the use of their bank account," says Cifas Chief executive Simon Dukes.

“Criminals may make it sound attractive by offering a cash payment but the reality is that letting other people use your account in this way is fraud and it’s illegal. You may end up with an extra £200 at Christmas but you could also end up with a fraud record – it isn’t worth it. We want to send a clear message to try and deter young people from getting involved in this kind of activity.”

The consequences of committing ‘Misuse of Facility’ fraud includes the risk of a conviction for money laundering, which carries a maximum prison term of 14 years, and could affect future applications for a mortgage, credit cards, mobile phones and loans.

“Criminals use money mules in an attempt to conceal or launder the money they have stolen from victims whose lives have often been irreparably damaged," adds Commander Chris Greany, City of London Police and National Co-ordinator for Economic Crime

“Be under no illusion, by allowing criminals to use your bank account you are assisting them in their crime and running the risk of getting a criminal record that could greatly harm your future."

But misleading creditors over loans extends to other forms of finance too, particularly mortgage fraud, where an applicant deliberately omits or misrepresents information on a mortgage application in a bit to secure a better deal, and insurance fraud - often fronting, where an applicant (typically a parent) secures cover for themselves on a car that will be predominantly used by a more risky driver that would be far more expensive to insure'.

Both are remarkably widespread. Indeed, this latest warning comes as MP for Edinburgh West, Michelle Thomson was reported to Scottish prosecutors for alleged mortgage fraud along with four other individuals. She denies any wrongdoing.