Teenage money mules. By Janine Starks.


So you think you know what a Smurf is?  If you’re still imagining those little blue characters in white hats, you’re blessed with innocence. 

In the world of money laundering, the term ‘Smurf’ or ‘Smurfer’ started with Columbian drug cartels using blue-rinse pensioners to transfer money around.  These days the profile of a smurf is more likely to be your cash strapped teenage son or daughter. 

For most Kiwi parents, the idea of their teen or young adult child getting involved in cleaning dirty money is pretty far fetched.  It’s the stuff of movies and crime gangs.  But don’t get too comfortable.  It’s an enormous and rising problem overseas.  We won’t be immune.

Most young adults are pretty savvy when it comes to scams.  They know about protecting the PIN number on their cards and giving out security details.  They are paranoid their weekend wages and birthday money might get taken by scammers, phishers and hackers. 

Brain fade comes in when other people want to deposit money in their account. Where’s the risk if you are receiving cash? 

Smurfers or money-mules allow small amounts to be transferred in and out of their bank accounts for a ‘cut’.  But passing on money in this way is a form of laundering.  It’s a crime with fines and prison sentences. 

Those involved in drug crime, tax evasion, stolen goods, or financial scams, clean up their money, by passing insignificant and irregular payments through the accounts of many ordinary people.  It’s known as ‘layering’ and is hard to detect.

Before you dismiss this one as fantasy – these schemes are dressed up to appear as genuine part-time employment.  

“It’s ok Mum, I’m helping to ship goods to other people, it’s all above board”. 

“It’s just a mystery-shopping scheme and I’m a New Zealand agent”. 

“It’s an online job with guys that deal with imports”. 

“These days everyone at Uni earns a bit of money off the internet”. 

Starting to feel a bit more uncomfortable? 

It’s easy to see how a teenager could think they’re not risking anything, when they’re the one receiving money into their account.  After all, the media only gets hyped up over people getting tricked into paying money out and clicking on dodgy bank emails. They’d never be so stupid. 

To make things murkier, your teenager could even be shipping cheap goods and letting the payments for these go in and out of their personal bank account for their ‘employer’.  It feels like a real business.  Some of these jobs are advertised as a “Payment Transfer Agent”.  Google the term yourself and see what pops up.   

In the UK, the incidence of those aged under 21 becoming entangled in this crime has doubled in the last year.  Children as young as 13 have been targeted at the school gate.  UK police believe that 65 percent of the 17,000 incidents carried out in the first half of 2017 were committed by those under the age of 30. 

Duped into money laundering

Many unwittingly respond to job offers, but others are approached via friends.  One scheme that swept through British Universities, involved the payment of student rent at a big discount.  It was squarely in the category of too-good-to-be-true, but plenty of young scarfies were happy to look the other way. 

Cash was placed with a student-mule.  He would bank the money then approach friends and offer to pay their rent.  To take up the offer they’d let him use their login on the university accommodation website, where their bill for the term would be settled.  In return, the lucky student only had to pay half the rent into the account of the mule, who on-paid it to his ‘employer’ for a small cut.  The crooks were losing half their money, but more importantly cleaning the other half and getting it into their own bank account without raising suspicion.  In this case it’s not only the money mule at risk, their friends with discounted rent could also be prosecuted.

Take a look at the list of ten red-flags in the table opposite and share them with your own kids.  Being prosecuted not only risks prison, but also their future creditworthiness, ability to get a mortgage, mobile phone contract and open new bank accounts.  A useful campaign started in the UK by the Fraud Prevention Squad had the strapline “A mule’s life is a fool’s life”.

Next generation money mules

We need to teach young adults to protect the use of their bank account:

1. A legitimate employer will never ask to use your bank account to receive company payments

2. Beware of overseas employers making payments through your account and giving an air of legitimacy by calling you their agent

3. Exercise caution on job descriptions such as Payment Agent, Processing Agent, Transfer Manager or NZ Payment Representative

4. Job ads may appear on legitimate employment websites and involve an interview and contract. These are not filters for authenticity

5. ‘Work from home’ with ‘no experience needed’ should set off alarms

6. Be wary of jobs where all interactions are online and involve transferring money or goods

7. Romance-mules are those who are tricked into receiving money and forwarding it on, because they have affection for someone. This person is working abroad or in the military and struggling to transfer money for ‘tax’ or a ‘funeral’

8. Beware of friends asking to deposit money in your account, no matter how legitimate the reason sounds

9. Never sell your bank account

10. Watch out for situations where an ‘employer’ overpays and asks for money back


Janine Starks is a financial commentator with expertise in banking, personal finance and funds management.  Opinions in this column represent her personal views.  They are general in nature and are not a recommendation, opinion or guidance to any individuals in relation to acquiring or disposing of a financial product.  Readers should not rely on these opinions and should always seek specific independent financial advice appropriate to their own individual circumstances.