The FCA released the results of a multi-firm review into firms’ use of the National Fraud Database

The review analysed cases across 13 firms where money mule accounts were suspected and reviewed data from a money mule detection tool.

Key takeaways from the review include:

➡️ Significant variation in the proportion of offboarded customers that were also reported to the NFD;
➡️ Only one firm conducted real-time checks on customers against the NFD;
➡️ A lack of response to information requests from the originating firm of transferred funds posed a significant challenge;
➡️ In almost one-third of cases, the FCA disagreed with firms’ decisions not to report offboarded money mules to the NFD;
➡️ Firms struggled to provide conclusive evidence that customers knowingly acted as money mules; and

➡️ Firms using a money mule detection tool were less responsive to alerts fired at generations after the first.

✅ Payment Service Providers #PSPs should ensure their internal policies and procedures for reporting money mule cases to the NFD align with the regulator’s expectations.

✅ PSPs should also calibrate fraud monitoring systems to effectively identify money mules while reducing false positives.

💡 Plenitude’s Fraud Prevention Practice conducts Independent Fraud Assessments, ensuring firms have the right systems and processes to reduce losses and increase detection rates