Money Mules: The New Scams Battleground for Banks

Money Mules: The New Scams Battleground for Banks

(This article first appeared on LinkedIn. If you’re looking for tips on how to stop mule payments in real-time, details can be found at the foot of this page. Thanks for stopping by)

Most people in fraud and financial crime will know that around 70% of APP scams begin on online platforms such as Meta, TikTok, and other social channels.

But far fewer realise a more uncomfortable truth: 98% of scam victims ultimately send their money to a UK bank account.

These figures from UK Finance are mirrored across many international markets. And they reveal a structural issue that cannot be solved by focusing on online platforms alone.

The uncomfortable value story

Volume tells us that many scams start online, but Value reveals a stark difference:

• “Only” 29% of total losses are linked to online sources. These tend to be lower-value cases.

• Conversely, 81% of the value lost to APP fraud in the UK flows through a UK-based bank account.

So, no matter how you slice the data, one conclusion is unavoidable:

Domestic money mule activity is the recurring enabler of modern APP fraud.

Not all banks are impacted equally

Analysis from the UK Payment Systems Regulator (PSR) shows huge disparities in APP mule exposure.

Some banks are experiencing money-mule inflows at rates far above their peers:

• Nationwide’s mule rate is 3x worse than Santander.

• TSB’s is 10x worse.

• Revolut is 18x worse.

• Skrill is an astonishing 421x worse.

Revolut and Skrill's CEO's will probably be well aware of this data, but as for TSB and Natiowide, I'm less sure. Fraud and Financial Crime teams within banks are often tempted to rationalise these variances away, however, doing so ignores a tough reality:

Criminals are preferentially exploiting some institutions—and those institutions need to understand why. Santander, and other banks like them prove that you can get it right.

Why this matters now

There is universal agreement that online platforms must do more to disrupt scam origination - expecting them to refund victims while banks still struggle with widespread mule abuse is unrealistic...

...and make no mistake: Meta’s lawyers—and others—will point to these mule disparities immediately in any liability debate.

Banks that want to reduce losses, reduce regulatory exposure, and reduce future refund liabilities need to address the root cause:

Money mules are the new scams battleground.

What banks can do next

The positive news is that there are practical and cost-effective actions that banks can take to materially reduce mule activity, improve APP fraud performance, and strengthen their position in the liability landscape. 

If you want to read about some simple steps to take to combat real-time mule payments, check out my other blog https://www.javloc.com/post/reducing-app-fraud-losses-by-screening-incoming-payments-some-simple-tips-for-bank-fraud-teams