Young people should be aware of the criminal implications of taking part in “money-mule” schemes.
Criminals are increasingly turning to teenagers to help them launder cash. Last year there was a 27% increase in the number of 14-to 24-year olds being used as “money mules”, according to new figures from anti-fraud group Cifas.
A money mule is someone who receives money from criminals into their bank account, before then transferring it on to another account for the fraudsters. In return, the person can keep a chunk of the money as payment.
“To avoid banks’ stringent identity fraud checks, criminals are increasingly turning to laundering their illicit funds through other people’s bank accounts, and probably giving them great compensation for doing so,” Dean Curtis of financial crime firm LexisNexis Risk Solutions tells The Daily Telegraph. Statistics show that young people are often targeted in this way, especially students, who are obviously more likely to be in need of spare cash, and who may not think to question the legality of such an arrangement.
It is the role played by social media that is of particular concern, says Cifas. Criminals are apparently using social networks and messaging apps such as Instagram, WhatsApp and Snapchat to target young people, making fake job offers to people or marketing moneymaking schemes, and then persuading those “who don’t ask too many questions” to transfer money “as a favour”, says The Daily Telegraph.
In one example quoted by the BBC, a 17-year-old was lured in by the line: “Have you ever held £2,000 at once in your hand?” All she then had to do was accept money into her bank account, then either transfer it on, or withdraw it as cash and hand it to a stranger, keeping a sum for herself.
It’s important that young people are aware that acting as a money mule is money laundering, says James Pickford in the Financial Times. This could mean prison sentences for those caught and can also make it hard for them subsequently to open bank accounts, get a student loan or take out a mobile-phone contract.
In the case quoted by the BBC, the bank refused to let the person withdraw the money paid into her account, and closed it down. She has been unable to open an account with another provider, having been flagged to other banks as attempting fraud. In short, as we always point out with scams, if something sounds too good to be true, it is – ignore it and get on with your life.
TSB pays out
TSB’s IT nightmare continues, with customers who have already been locked out of their accounts for seven days now complaining that their standing orders are bouncing too. Some customers have reported that standing orders haven’t been paid, while others say that standing orders they had cancelled have still been debited from their accounts.
At least two million customers have been locked out of their accounts due to the bank’s IT problems. TSB has promised to compensate customers who have lost out financially, in a move that could cost it up to £40m, but hasn’t said it will compensate for inconvenience caused. Cases will be dealt with on a “case-by-case basis”, says the bank. It has also pledged to cancel overdraft fees in April and boosted the interest rate on its Classic Plus account from 3% to 5% as compensation.
But despite its promises, the bank still faces a mass exodus of customers looking for better service. However, people may struggle to leave immediately, as TSB asked other banks last Friday to freeze switches from its customers – because it couldn’t process the switches due to its ongoing IT problems.
Pocket money… a current account with a cocktail
• Scammers are having a field day on eBay, with the auction site standing “accused of failing to protect users from scams and dodging responsibility for the number of fake listings it allows to be posted on its website”, says Amelia Murray in The Daily Telegraph. More than 42,000 reports about the site were made to Action Fraud last year, with an average loss of £1,349. Yet eBay’s own terms and conditions “allow it to shrug off responsibility” for fake listings, saying that it is “not responsible” for “ensuring the accuracy or truthfulness” of users’ information.
Avoid becoming the victim of an eBay scam by being wary of deals that have “unrealistically low prices”, says Murray. Always use eBay’s messaging service rather than messaging directly, and use PayPal over bank transfers, as you are more likely to get a refund this way. Finally, if buying a car, insist on seeing it in real life before you pay (vehicles are not covered by eBay’s money-back guarantee).
• Contactless payments are booming, but they might not be as safe as you think, says Anna Temkin in The Times. Contactless fraud hit £14m in 2017, according to figures released by Financial Fraud Action UK, up from £6.9m in 2016 and £2.8m in 2015. The rise is largely due to the increasing number of people paying by contactless. If your card is stolen, criminals can make purchases worth up to £30 without having to enter a PIN.
There have also been cases of fraudsters “skimming” details by using card readers or software to scan your card information when standing very close to you (though this is rare). If you are worried about the security of your contactless card, you can choose to have the feature disabled on your cards by calling your bank.
• First Direct has dumped its old £125 incentive for switching to one of its accounts. Instead, it is now trying to lure in new customers with freebies and courses. If you switch to an account with them, you can claim anything from a £150 voucher for travel company Expedia, to Bose wireless headphones or a cocktail-making course, says Tara Evans in The Sun. New customers need to pay at least £1,000 into their account, and must then register on the gift site within 30 days; they then have 90 days to choose a gift.