Data analytics and consumer credit reporting company, Experian, has launched a new service, ‘Mule Score’, which is set to help banks and building societies identify and close “money mule” accounts, which are used to house fraudulently-obtained funds.

Money mules are individuals who agree to let their bank accounts be used by criminals in exchange for cash, with 42% of first-party current account fraud now mule-related, according to new insights from Experian. Additionally, the fraud rate for current accounts rising by 13% in the first three months of 2023 compared to the last quarter of 2022.

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

These funds are often the proceeds from APP fraud, where the victim is tricked into transferring money to various mule accounts to hide its origin, before being distributed to the fraudster’s account. These funds are often transferred between two or three other accounts, before being transferred to international accounts or sometimes, crypto wallets, which are then transferred back into the UK financial system.

Banks and other account providers do not currently have the information on where the money is being received or sent to except for confirmation of the payee. This makes it difficult for the banks and building societies to identify and ultimately investigate accounts potentially being used for these purposes.

Developed by Experian DataLabs, Mule Score will analyse 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 allows for banks to assess their entire portfolio, so they can quickly identify questionable account activity.

In trials, Mule Score was able to accurately identify more than 50% of the highest risk mule accounts, and is set to allow for banks to avoid onboarding suspicious accounts at the point of opening. The solution is also expected to reduce fraud losses and operational costs, whilst also supporting consumers who are at risk, as well as preventing fraudulent funds entering the mainstream financial system.

Managing director, identity and fraud, Experian UK&I, Eduardo Castro, said: “The level of fraud and financial crime in the UK represents a threat to financial institutions and their customers. Experian, thanks to our data, analytics and technology, is uniquely placed to help. We are committed to helping eliminate financial crime and ensuring safe financial access for all.

“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.”

Experian is showcasing the solution at London Tech Week, taking place at the Queen Elizabeth II Centre from 12-16 June.

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