FCA report on money is muling, and the criminal misuse of the financial system facilitates fraud.

THE FCA shares [23/1/25] the key findings from its review of payment services and account providers’ use of the National Fraud Database (NFD) and a money mule account detection tool to tackle risks associated with money muling activities.

Who this report and review applies to

• UK payment service providers (PSPs), which include.

• Banks,
• Building societies,
• Payment firms,
• e-money firms and

• Other businesses that provide payment accounts

Background to the review

Money muling is a money laundering technique where an individual - a 'money mule' - moves the proceeds of crime on behalf of criminals. In some cases, individuals are involved unwittingly. 

The following identifies money mules’ integral role in moving the fraud proceeds and enabling other crime types. 

• The National Economic Crime Plan 2 (2023–2026)Link is external

• https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/1147515/6.8300_HO_Economic_Crime_Plan_2_v6_Web.pdf

• Fraud Strategy Link is an external

• https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/1154660/Fraud_Strategy_2023.pdf

Money muling can also result in serious consequences for those persuaded or duped into allowing criminals to move money through their accounts. This underlines the importance of disrupting mule activity to protect the public.

FCA data indicates that 25 firms offboarded 194,084 money mules between January 2022 and September 2023. Of these offboarded money mules, only 37% were reported to the National Fraud Database (NFD).

Effective use of the NFD, together with detection tools designed to trace the proceeds of fraud across payment networks, is critical in tackling mule activity. We have reviewed how firms use these controls and now share our key findings.

These findings should be read in conjunction with our previously published findings, published in November 2023, where we shared our expectation that firms strengthen their controls during onboarding, improve transaction monitoring to detect suspicious activity involving money mules, and robustly address the associated risks.

https://www.fca.org.uk/publications/multi-firm-reviews/firms-use-national-fraud-database-money-mule-account-detection-tools