What is a money mule account?
A money mule account is a bank, payment, or crypto account used to receive money from crime and pass it on for someone else. The FBI defines a money mule as "someone who transfers or moves illegally acquired money on behalf of someone else". The account is the tool that makes that possible.
A typical case starts with a scam. The victim sends money to an account controlled by a mule, and the mule quickly forwards it to other accounts, withdraws it as cash, or converts it to crypto. Each hop puts more distance between the criminals and the stolen funds.
What are the three types of money mules?
Not every mule knows they are one. The FBI groups money mules into three types, based on how aware they are:
- Unwitting: people recruited through a fake job or online romance, who use their own account to receive and forward money without knowing it's criminal
- Witting: people who ignore obvious warning signs, sometimes even after their bank has warned them, often for financial gain
- Complicit: people who know their role, open accounts at several banks on purpose, advertise their services, recruit other mules, and run "funnel accounts" that collect money from lower-level mules
For a payments firm, all three types look the same at first. The difference shows up in how the account behaves over time.
What are the red flags of a money mule account?
Mule accounts tend to follow the same pattern: money in from many sources, money out fast. Australia's financial intelligence agency, AUSTRAC, lists indicators that banks and payment firms can watch for:
- Many unrelated senders: deposits from multiple third parties or from accounts in different names, which don't fit the customer's profile
- Fast pass-through: outgoing transfers or cash withdrawals right after money arrives, often to unrelated parties
- Sudden activity: an inactive account that starts seeing frequent transactions
- A customer who can't explain the money: someone who knows few details about a payment, seems to be directed by a third party, or won't say where funds came from
- Shared identity details: several customers using the same details, such as a mobile number
- Test payments: a small "test" transfer from a third party before larger amounts arrive
No single flag proves an account is a mule. A pattern of several is what should trigger a closer look.
Who pays when scam money lands in a mule account?
In the UK, the firm that holds the mule account now shares the bill. Since October 7, 2024, payment firms must reimburse victims of authorized push payment (APP) scams sent over the Faster Payment System.
The UK's Payment Systems Regulator splits that cost 50:50 between the sending firm and the receiving firm. Claims are capped at £85,000 each, and the Bank of England set the same limit for CHAPS payments.
The split is deliberate. The regulator designed it to give receiving firms a direct financial reason to stop scam payments, and the receiving end is where mule accounts sit. A firm that lets mules onboard now pays for half of every scam that flows through them.
The US has no equivalent rule. Regulation E covers an unauthorized electronic fund transfer, which it defines as one "initiated by a person other than the consumer" without authority. A scam victim who sends the money themselves usually falls outside that definition. Recovery then depends on how fast the banks involved act, and on whether the money is still in the mule account.
How do payment firms stop money mule accounts?
Mule controls work best when each one maps to a red flag. They usually sit in four layers:
- Onboarding checks: KYC and identity verification catch stolen identities and repeated details, while KYB covers companies, which complicit mules sometimes register just to receive funds
- Transaction monitoring: rules that flag money arriving from many senders and leaving soon after
- Crypto screening: wallet screening on incoming addresses, since mule schemes also move money through crypto, including cash deposits at crypto kiosks
- Information sharing: in the US, Section 314(b) lets financial institutions share information about suspected money laundering, which helps link mule accounts spread across several firms
The common thread is pattern detection. One payment rarely reveals a mule, but the account's behavior over time often does.
How does Due check accounts and transfers?
Due runs checks both when an account is opened and when money moves. Per Due's API documentation:
- At onboarding: business accounts go through KYB, where shareholders, beneficial owners, and directors get identity checks plus PEP and AML screening
- On every transfer: once funds arrive, each transfer runs through automatic policy checks before payout
- When checks fail: the transfer moves to manual review by Due's team instead of paying out
