Under-21s targeted by money launderers, warns UK fraud agency

This article is the latest part of the FT’s Financial Literacy and Inclusion Campaign

Fraudsters are capitalising on a tough economic climate to target young people online, offering cash in exchange for laundering funds.

One in five “money mule” cases in the UK in the first six months of this year involved people aged under 21, according to data from Cifas, the fraud prevention agency. More than 17,000 individuals were suspected of providing their bank account details to fraudsters, enabling criminals to transfer illicit funds via their account in exchange for a cut of the proceeds.

Cifas and the banking lobby group UK Finance, which represents more than 300 financial companies, announced an expanded schools initiative to discourage children as young as 10 from being lured into aiding fraud, as concerns grow over the reach of the criminals behind the trend.

“Younger people are being targeted . . . There’s a bigger cost for the criminal of persuading older people,” said Mike Haley, chief executive of Cifas. He said individuals were largely approached through online platforms such as TikTok and Instagram.

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Social media companies have come under fire over their safeguards for customers, with banks accusing them of enabling fraud. UK Finance wrote to chancellor Jeremy Hunt last week highlighting findings that showed more than half of all digital payment scams originated on Meta-owned platforms.

Meta said: “We use a combination of proactive detection technology and human review to find and remove this violating content.”

The banking body said money mules played a role in laundering the proceeds of authorised push payment fraud — where fraudsters trick people into transferring sums of money to them — with social media playing a prominent role in how criminal groups communicated.

“Social media organisations have a great deal of control over [various] types of communication,” said Paul Maskall, manager of fraud and cyber crime prevention at UK Finance, who pointed to the prominence of platforms in day-to-day life. “We would welcome a great deal more moderation.”

Cifas and UK Finance launched the Don’t Be Fooled campaign targeting money mule activity two years ago after young people were targeted by gangs posting fake job ads to lure them into laundering funds.

Haley said banks were adopting a less hardline stance towards young people caught up in fraud, judging them to be less complicit in the crime. But he cautioned that more needed to be done to educate individuals on the potential consequences.

Mules are more likely to be caught than the fraudsters using them, while banks are required to close their account and report them to authorities.

Participants risk losing access to banking services for up to six years, preventing them from being able to take out credit, phone contracts and access student loans. Few are imprisoned, but anyone caught acting as a mule will have a criminal record and could face up to 14 years imprisonment.

TikTok said users were required to adhere to community guidelines and it had partnered with several charities to improve users’ financial literacy.