If you are involved with BSA/AML compliance, you know that it will keep you on your toes! Bad guys are always looking for new ways to get around the rules!
One newer development that is increasing dramatically is young people acting as “money mules”. Fraudsters/money launderers will often target college students as they are finishing college and potentially heading abroad. They get students to sell their bank account details, such as their login information, for as little as $100-$200. The fraudsters then take over these accounts and use them to launder money. Gaining access to an established account helps the fraudster avoid customer identification and customer due diligence procedures, which would come into play if they tried to open a new account. Sometimes, the fraudsters will even convince the students to cooperate with them. For example, the fraudster may deposit or wire a sum of money into the account and have the student transfer all but $200 to another account. The student gets to keep the $200 for their trouble. You can see where this might be an attractive money maker for a poor college student!
So, what should you do?
You need to be aware of your student accounts and what is considered “normal” activity for them. How do you know what’s “normal”? You refer to the customer due diligence questions you asked them at account opening. You did do that, right?! Sudden changes in transaction volumes, compared to what was normal, could indicate trouble. Increased education for your student customers about the effects of fraud is another approach you could take to combat this.
BSA Consulting – Other Trends
Unfortunately, student mules aren’t the only new trend in BSA/AML compliance. There are also noted increases in debit/credit card data breaches and fueling scams at gas stations. Check out the March edition of our Banking on BCC Magazine for more.