CPS guidance on money laundering – How it will impact CIFAS markers

There is bad news for the victims of scams, particularly when people are tricked into becoming money mules or offered opportunities for trading”, usually crypto currencies, particularly through the Luno app. 

On 2nd June 2021 the Crown Prosecution Service issued guidance to banks and other regulated financial services providers that they will be committing an offence contrary to Section 330 Proceeds of Crime Act 2002 if they fail to notify the police where they suspect money laundering. 

Banks no longer have the discretion to consider whether or not a person is actually guilty of money laundering. If they suspect money laundering at all and fail to notify the police, they are liable to be prosecuted. 

Allowing someone else to use your bank card or account details is called Money Muling. It is akin to money laundering. It is also a breach of your bank account conditions and the banks are entitled to close your account without notice if you do this and will be forced to report you to the police. 

The ramifications don’t stop there. Banks will also report you to an organisation called CIFAS which maintains a database of individuals considered to be a risk of committing fraud or money laundering. In the worst cases these markers can prevent someone from obtaining credit or opening a bank account for six years. The database is shared to all other banks and financial institutions – it does not go on your credit rating, and frequently people are unaware that they have such markers against them. There were 84,000 cases of Misuse of Facility reported to CIFAS in 2019, 74% of which related to money mule activity. This figure is likely to have increased substantially during lockdown. 

These markers can also cause problems when people apply for jobs, particularly in the financial services sector, but also other sectors because employers will want you to have a bank account into which wages can be paid. Some employers will check CIFAS records and reject applicants if they find adverse markers.  

Landlords ask for credit checks and, in some circumstances, can refuse to rent out properties to people if they become aware of CIFAS markers. Applications for Student Loans may also be refused if the applicant does not have a bank account. 

These issues really should be taught as part of citizenship in schools but are not. Statistics show that people under the age of 25 are 85% more likely to become victims of scams than those over the age of 25.   

Contact us, we are here to help

Our Head of Private Prosecutions, Jeremy Asher is a regulatory lawyer with proven experience in successfully challenging such markers for company directors and individuals. Please contact him if you need support or advice.