This week, our Secret Crime Fighter has seen a resurgence in illegal social media raffles. For banks, the red flags are pretty easy to spot, so read on to find out how the scam is happening, and how you can stop it.
The first step in running an illegal raffle is to recruit people to receive the fraudulently obtained money. With the current resurgence in these raffles, our Secret Crime Fighter has found that the mules are mostly women, aged between 25 and 35. Adverts to attract these women have been found on Facebook and Mumsnet and are typically targeting stay-at-home mothers who want to make some extra cash on the side.
When our Secret Crime Fighter contacted some of these unwitting money mules, their responses indicated they had no idea that the raffles were illegal.
With the mules in place, the next step in running an illegal raffle is to get people to pay money to be involved in the raffle. Again, these adverts are often found on Facebook, and have a ponzi scheme-type ring to them - “pay £5 and the more people you get to participate the greater chance you have of winning”.
With a relatively low barrier to entry - £5 or £10 to participate - and by encouraging the victims to get their friends and families involved, the criminals are able to get hundreds of pounds before the raffle is shut down or reported. As this article explains, there are too many new raffles popping up to be controlled properly.
Once the money is sent to the mule accounts, the women who own these accounts are told to pass the money on to a third party, keeping some of it for themselves.
There are some clear red flags with this typology, so our Secret Crime Fighter was able to put in place some simple transaction monitoring rules to flag the mule accounts and stop the payments being sent on.
These rules were focussed on the number of inbound payments received into the account - 20+ per day - where there were no other payments, no direct debits or bills set up, and the customers were predominantly women aged 25-35.
Thanks for reading our latest Secret Crime Fighters newsletter. If you have an interesting typology that you’d like to share, we’d love to hear about it! Please email us at [email protected].
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Expanding Compliance Testing: New Modules for Reg E, Reg B, and Reg ZThis week, our Secret Crime Fighter has seen a resurgence in illegal social media raffles. For banks, the red flags are pretty easy to spot, so read on to find out how the scam is happening, and how you can stop it.
The first step in running an illegal raffle is to recruit people to receive the fraudulently obtained money. With the current resurgence in these raffles, our Secret Crime Fighter has found that the mules are mostly women, aged between 25 and 35. Adverts to attract these women have been found on Facebook and Mumsnet and are typically targeting stay-at-home mothers who want to make some extra cash on the side.
When our Secret Crime Fighter contacted some of these unwitting money mules, their responses indicated they had no idea that the raffles were illegal.
With the mules in place, the next step in running an illegal raffle is to get people to pay money to be involved in the raffle. Again, these adverts are often found on Facebook, and have a ponzi scheme-type ring to them - “pay £5 and the more people you get to participate the greater chance you have of winning”.
With a relatively low barrier to entry - £5 or £10 to participate - and by encouraging the victims to get their friends and families involved, the criminals are able to get hundreds of pounds before the raffle is shut down or reported. As this article explains, there are too many new raffles popping up to be controlled properly.
Once the money is sent to the mule accounts, the women who own these accounts are told to pass the money on to a third party, keeping some of it for themselves.
There are some clear red flags with this typology, so our Secret Crime Fighter was able to put in place some simple transaction monitoring rules to flag the mule accounts and stop the payments being sent on.
These rules were focussed on the number of inbound payments received into the account - 20+ per day - where there were no other payments, no direct debits or bills set up, and the customers were predominantly women aged 25-35.
Thanks for reading our latest Secret Crime Fighters newsletter. If you have an interesting typology that you’d like to share, we’d love to hear about it! Please email us at [email protected].
