ANZ steps up money mule fight

ANZ’s new money mule detection technology has already picked up thousands of accounts linked to suspicous activity, which it says is key to stopping scams.

Money mules are used by criminal groups to receive stolen funds from frauds or scams, or deposit cash from organised crime.

A handful of Australian banks are becoming the destination of choice for criminal groups seeking to move money, with ANZ warning its new systems had picked up 3200 accounts linked to suspicious activity.

ANZ’s head of customer protection Shaq Johnson said the bank was growing concerned its efforts to stamp out mule accounts was leading to criminal groups setting up at other banks.

Mr Johnson said ANZ was concerned criminal groups behind scams, frauds and money laundering were migrating to other banks with lax know-your-customer requirements and little monitoring of accounts.

“Their controls are not as mature as other banks,” Mr Johnson said. “Those banks are almost becoming the banks of choice for scammers and their accounts get targeted heavily and we see that.”

Money mules are used by criminal groups to receive stolen funds from frauds or scams, or deposit cash from organised crime, using otherwise “clean” accounts to minimise individual transaction sizes and avoid law enforcement scrutiny.

Mr Johnson said shutting down mule accounts and identifying who was using them was key to stopping the scams.

“We fundamentally believe that us tackling this problem will be a cornerstone of being able to fight scams and other financial crimes,” he said.

The growing problem of financial scams has been impossible to ignore.

ANZ CEO Shayne Elliott. Picture: Arsineh Houspian

The government has poured funds into setting up a National Anti-Scam Centre, while the banking industry also signed a landmark co-operation deal in a bid to deal with the problem.

The National Anti-Scam Centre warned in November that Australians had lost more than $114m to scams between just July and September.

In November the Australian Banking Association and the Customer Owned Banking Association both inked a deal with government backing to develop a suite of tools to stamp out scams and frauds, including measures which would stop the use of mule accounts.

Banks will be required to adopt controls to prevent identity fraud and adopt at least one biometric check for new customers opening accounts online by the end of 2024.

Assistant Treasurer Stephen Jones said the government was considering imposing penalties on banks that failed to combat mule accounts, but for now was concentrating on raising standards within the industry.

“We’re giving them the tools they need … then we’ll look at whether we need to extend that,” he said.

Mr Jones said the government would also look at imposing new rules on companies, including superannuation funds or cryptocurrency platforms, that failed to adopt more stringent customer verification systems.

“We want to ensure that we have a high bar, we don’t want to be seeing institutions used as vectors for criminal activity,” he said.

ANZ revealed at its annual meeting in December that it had invested in new mule detection technology in a bid to stop the misuse of customer accounts.

Chief executive Shayne Elliot told investors the bank had run a pilot, using artificial intelligence, to identify suspected mule accounts being used in frauds, scams, money laundering and other financial crimes.

Mr Johnson said ANZ’s pilot picked up 1400 high risk accounts. This was in addition to the almost 3200 ANZ mule accounts identified by the bank between October and December after going live with its account monitoring platform.

ANZ head of customer protection Shaq Johnson. Picture: Eser Koch

Mr Johnson said the bank was aware of many mules being paid by criminal groups to set up bank accounts for the express purposes of receiving funds, as well as those who sell access to their accounts when leaving the country.

He also said many mules were recruited through fake job schemes, offering working from home administration roles which involved moving money between accounts.

Mr Johnson said identifying mule accounts allowed the bank to gain visibility of other mule accounts being used in a web to wash transactions through the banking system.

“There are certain characteristics that are common, that helps us link the dots,” he said.

Mr Johnson said the bank would refer mule accounts to police, but did give a first and final warning to those it believed may be unclear of their wrongdoing before closing their accounts.

“If they do this again, we terminate and report to the police,” he said.

ANZ had several wins after going live in October with its mule detection systems, picking up multimillion-dollar transactions after scammers redirected legitimate business transactions by providing false account details.

Mr Johnson said a $4m transaction led ANZ to 37 other mule accounts being used by criminal networks.

Many mule accounts ultimately led to “high risk destinations”, with criminal groups using offshore banks or crypto products to launder money and export their ill-gotten gains.

ANZ’s efforts to stamp out mule accounts comes after it stepped up customer onboarding systems in 2020 by adding biometrics capabilities.

Mr Johnson said the bank had grown concerned about criminal groups buying personal data in bulk to open accounts. In response the bank introduced systems that flagged suspicious behaviour.

Criminal groups responded to these controls by aggressively recruiting money mules to allow access to existing bank accounts.

ANZ has also introduced delays for mule accounts it believes may be used by scammers in a bid to allow time to report scams.

Mr Johnson said ANZ’s actions have “helped us become less of a bank of choice for criminals”.

Originally published as ANZ steps up money mule fight