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As the recession begins, expect an increase in the hiring of money mules, says the FCA director

The Financial Conduct Authority’s Executive Director for Markets, Sarah Pritchard, has warned there would be an increased amount of scams owing to the cost of living problem.

She said, "Sadly, we expect financial crime to become even more prolific during the cost of living crisis."


More than seven out of 10 consumers claimed they had been the subject of scams in the previous three months, according to the FCA Exec.


The watchdog has previously noticed a rise in "l“loan fee fraud, ghost broking and false access to rebates from utility companies," Ms. Pritchard emphasized.


The FCA also predicts a possible increase in the number of persons hired as money mules, who are instructed to move money via their accounts in exchange for payment.


"The temptation for people in difficult circumstances is huge," Ms. Pritchard remarked at the 1LOD Financial Crime Summit. "But so are the consequences."

She added: “This is money laundering – criminals trying to move cash ill-gotten from modern slavery, drugs, fraud, terrorist financing and other crimes. It can be detected, and can result in prosecution and a red flag in financial records."


She questioned the audience in her remarks whether they had thought about how their companies were adjusting their financial crime controls to lessen the heightened risks brought on by the cost of living problem.


"How are your firm’s customers likely to be impacted, and is your firm doing enough to raise their awareness of crimes such as APP fraud, pension scams and ghost broking so they are not easily exploited?"  Ms. Pritchard stated.


She emphasized that working together was necessary to combat the growing menace of financial crime and that "no one group can do it on their own."


"If it takes a village to raise a child, it takes a community to defeat a threat," she said.


"Fighting crime should never be left to one body or one team within an organisation…."


"It is that partnership between firms, regulators and government that holds the key," according to Ms. Pritchard.


"Together we can have a bigger force multiplier effect that leaves consumers more secure and confident, boosting the health of the financial systems we all rely on and ready to face the next challenge," she said.


She mentioned that the FCA had recently reviewed challenger banks and had found system flaws that might be exploited, such as poor client due diligence and "insufficient rigour" when handling transaction warnings.


She did, however, acknowledge that the FCA also adhered to best practices, including as the use of geolocation data, technology, and data to confirm consumer identification.


"My message to all firms is this: embed your financial crime checks in your systems from day one, but keep evolving as the threats evolve. Use the power of data and tech, and stay alert for situations in which you may need to recalibrate your defences and alerts," she continued.

By fLEXI tEAM

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