On 23 January 2025, the Financial Conduct Authority (FCA) published the key findings from its multi-firm review on payment services and account providers’ use of the National Fraud Database (NFD) and money mule account detection tools to tackle risks associated with money muling activities.

Background

The FCA explains that money muling is a money laundering technique  where an individual – a ‘money mule’ – moves the proceeds of crime on behalf of criminals, allowing the criminal misuse of the financial system and facilitating fraud. It notes that using the NFD effectively, together with detection tools designed to trace the proceeds of fraud across payment networks, is critical in tackling mule activity.

The review

The FCA has reviewed how firms use these controls and is sharing its key findings, noting that they should be read in conjunction with its previously published findings in November 2023 (where it shared its expectation for firms to strengthen their controls during onboarding, improving transaction monitoring to detect suspicious activity involving money mules, and to robustly address the associated risks).

The review findings include what the FCA found in its review of firms’ use of the NFD (both areas for improvement and key challenges) and what it found in its review of firms’ use of a money mule account detection tool, along with some additional findings.

Next steps

The FCA notes that it will continue to directly engage with the firms included in the review to ensure they consider these findings to enhance their overall systems and controls for fraud. It also expects all other payment services and account providers to consider their own systems and controls against the findings, ensuring they take a proactive approach to identifying and swiftly remedying any weaknesses in their response to tackling the risks posed by money muling.

Finally, the FCA emphasises the need for firms to have strong and effective systems and controls to mitigate the risk of money mules, and to consistently keep under review their detection and monitoring methodologies, prioritising the identification of money mule activity, alongside educating consumers about the risks of money muling.