BLOG: Student money mules are on the rise and agents should be scared

Estate agents face an emerging challenge following a reported increase in international student enrolments.

With a record 44% of 18-year-olds applying for higher education and a surge in international student numbers now reaching 679,970, estate agents should be aware of unsuspecting student money mules.

Money mules are people who let someone else use their bank account to transfer money, often keeping a little cash for themselves. Money mule recruiters may try to befriend students, who often think they’re doing a favour for a friend. Instead, they find they’re transferring criminal money and risking a criminal record.

DEMOGRAPHIC SHIFT

Adapting to this demographic shift in student enrolments in the UK – particularly in the growth of non-EU student numbers – is critical for maintaining compliance. Especially in light of potential sanctions and Politically Exposed Persons (PEP) list exposure and the threat of money mules.

Recent SmartSearch data highlights a concerning trend in the sector. A significant number of estate agencies are yet to innovate their onboarding and monitoring practices to meet new threats. Only four out of 10 (43%) of the agents we spoke to regularly check clients against sanctions and PEP lists, while a further 37% are adamant that the industry is not at risk at all.

This naivety heightens the risk of unconsciously ‘sleep walking’ into illegal activities like sanction violations or money laundering while this influx of international students represents more than just a statistical increase, it brings the potential threat of Politically Exposed Person (PEP) and sanctions list exposure.

MONEY MULES

The National Crime Agency identifies money mules as ‘those who allow their bank accounts to be used to move money’. Overseas students are likely to be targeted because they already have a bank account open in the UK and could be used as a way to channel funds out of a country. Students may not be aware that their account is being used for illegal means or may be acting under duress.

Estate agents must critically self-assess, and ask themselves: Are our client onboarding processes robust enough to manage the complexities of a growing international client base?

The real challenge for estate agencies extends beyond initial client screening to maintaining continuous vigilance. Sanctions lists are dynamic and can change unpredictably, requiring constant attention.

Agencies that neglect the importance of ongoing checks not only risk hefty fines but also reputational damage.

GEOPOLITICAL CLIMATE

In our rapidly changing geopolitical climate, it is crucial for estate agents to not only comply but also proactively stay ahead.

Understanding the complexities of international sanctions and having robust digital systems for monitoring are no longer optional.

Electronic Verification (EV), is transforming the sector. By offering real-time monitoring and alerts, digital compliance enables estate agents to respond promptly to changes in sanctions or PEP statuses. Adopting such technology is a strategic move, safeguarding both the agency and its clients.

REGULATORY DEMANDS

Compliance is more than meeting regulatory demands, it plays a key role in preventing issues such as human trafficking, tax evasion and fraud. Such crimes often impact society’s most vulnerable and criminal gangs will continue to exploit the property market if adequate compliance measures are not in place.

With the increasing presence of international students in the market estate agents must take the lead in compliance and ethical practices. Adopting advanced digital solutions, such as EV, is crucial for regulatory compliance and ensuring the integrity and future of the real estate industry.

Guy Harrison (main picture) is Chief Executive of SmartSearch