Experian launches new service to prevent ‘Money Mule’ account fraud

Money laundering is estimated to cost the UK economy more than £100 billion each year, while Authorised Push Payment (APP) fraud losses reached £485 million in 2022.**

Experian today announces a new service which will help banks and building societies identify and close ‘money mule’ accounts which are used to house fraudulently-obtained funds.

Money mules are individuals who have agreed to let their bank accounts be used by criminals in exchange for cash. According to new insights from Experian, 42% of first-party current account fraud is now mule-related, with the fraud rate for current accounts rising by 13% in the first three months of the year.*

The funds deposited in these accounts are often the proceeds from APP fraud – with the mule tricked into transferring money to various mule accounts to hide the origin of money – before then being distributed onto the fraudster’s own accounts.

Currently, banks and other account providers don’t have information on where the money is being received from or being sent to except for confirmation of the payee, making it difficult for them to identify and investigate accounts potentially being used in this way.

Experian Mule Score aims to solve this problem. By analysing account opening history and turnover activity, Experian bureau data, and the modelled characteristics of more than 200,000 confirmed mule cases, the machine learning-powered solution enables banks to assess their entire portfolio so they can easily spot questionable account activity.

In proof-of-concept trials, the solution was able to identify accurately more than 50% of the highest risk ‘mule’ accounts. The solution will help banks avoid onboarding suspicious accounts at the point of opening, reduce fraud losses and operational costs, support consumers who are at risk, as well as preventing fraudulent funds entering the mainstream financial system.                               

Eduardo Castro – Managing Director, Identity and Fraud, Experian UK&I, said: “The level of fraud and financial crime in the UK represents a threat to financial institutions and their customers. (…) Mule Score is the first solution of its kind, giving financial companies a comprehensive view of account activity, helping prevent them from onboarding potential mule accounts and detect already opened accounts which are suspicious.”

Funds held in a mule account are typically moved to between two and three others before being transferred to international accounts, or in some cases, crypto wallets, and then reintegrated back into the UK financial system. Accounts being used for mule activity tend to be newly-opened, but the holder will have a number of older accounts that can continue to be used to transfer funds if the newer one is closed.

Experian Mule Score was developed by Experian DataLabs, an in-house team of data scientists driving innovation by using the latest cutting-edge data analysis techniques to build products and solutions which help businesses meet numerous challenges across sectors.

Experian is a market leader in fraud prevention technology and prevented more than £1.8bn of fraudulent transactions in 2021.

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About Experian Mule Score

By using a combination of information sources including CAIS (Credit Account Information Sharing) and CAPS (Credit Application Previous Search), fraud feedback data, Experian Fraud Score and machine learning technology, Mule Score can help banks and other account providers to identify, investigate and close, accounts suspected of being used to deposit defrauded funds.

**Analysis based on data from the National Hunter Fraud Prevention Service, comparison between Q1 2023 and Q4 2022.

*Economic Crime and Corporate Transparency Bill factsheet, April 2023/UK Finance Report, May 2023