Money mule pockets cash after Banking Ombudsman unfreezes accounts
Sunday, 19 July 2026
A man who was duped into being a money mule turned an unexpected profit of $1500 for his actions when the Banking Ombudsman ruled his bank had wronged him for freezing all his accounts.
He also got his name removed from a list of those identified by banks as operating the roughly 5000 money mule accounts in New Zealand, and from the new Fraud Information Exchange (FIX).
In December 2025, the man withdrew $475 that had been deposited into one of his personal accounts and later transferred to another of his accounts. He then spent the money at an electronics store, although the ombudsman’s note on the case published this month does not specify what he spent the money on, if he got to keep the items, or delivered the items to actual scammers to resell.
The bank, whose identity is shielded by Banking Ombudsman scheme rules, was suspicious of the transaction, having been informed the $475 was the proceeds of a Facebook Marketplace scam.
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It tried to contact the man, but couldn’t, so froze all his personal and business accounts.
The bank gave him 14 days’ notice of its intention to close all his accounts and reported him as a “complicit money mule” to FIX, which banks use to alert each other over suspected and proven money mules, money launderers and fraudsters.
But the man complained about the way the bank treated him, and Banking Ombudsman Nicola Sladden found its terms and conditions only allowed it to freeze, or close, the accounts involved in the laundering of the money.
“It had no justification for freezing his other accounts because its terms and conditions required it to have a reasonable suspicion that any particular account had been used to facilitate fraud,” Sladden ruled.
She told The Post banks had significant powers in relation to their customers, and they had to use them carefully.
The ombudsman also decided the bank had been wrong to inform FIX the account holder was a “complicit money mule”.
The man believed he was doing “legitimate online work” and did not know it involved fraud, Sladden found.
She further found the bank had no firm evidence that the mule knew about, or was involved in, the fraud. Instead, he had been the victim of a scam himself.
“In short, the bank should not have reported him to the fraud data exchange as complicit in the fraud,” Sladden said.
She recommended the bank correct its report about the man on FIX, and pay compensation for stress.
The case has shone the spotlight on FIX, which was set up last year by banks aiming to stem fraud losses for customers following a period of bad publicity that led to the Government intervening to force the banking industry to strengthen protections.
Through it, banks can share scammer account information to help them prevent criminal activity, and freeze funds where appropriate.
That makes it similar to the insurance industry’s Insurance Claims Register, which it has operated since 1999, and contains the names and details of people who have submitted fraudulent claims to insurers, or tried to defraud insurers in other ways.
Like insurers, banks reserve the right in their terms and conditions to share customer information with a wide variety of third parties, including credit reporting agencies like Centrix, and industry groups that help them identify, detect, prevent, investigate and respond to fraud, scams, and other criminal activity.
FIX is run by a private company called Get Verified, which is owned by the largest 10 retail banks, and also manages the “Confirmation of Payee” system that was introduced to reduce fraud, as well as payments being accidentally sent to the wrong accounts.
Since launch, the Banking Association says FIX has helped recover $10 million in stolen funds for scam victims, and identified nearly 5000 money mule accounts, which are domestic bank accounts used by scammers to transfer stolen funds, either knowingly or unknowingly by the account owner.
The association says mule accounts are often used to send money overseas, from where it’s almost impossible to recover it.
Duncan Robertson, chief executive of Get Verified, said that since going live in early September, data on 40,000 suspicious (money laundering and fraud) transactions had been shared through FIX.
That had enabled banks to freeze accounts before money could be transferred out into overseas accounts, or cryptocurrencies, which had resulted in around $1 million of victims’ money being saved each month.
Robertson did not know whether a person who is entered into FIX as a “willing” money mule was able to retain accounts with their bank, or whether other banks would refuse to take them as customers.
Get Verified also operates the “confirmation of payee” system banks brought in that gives people making electronic transfers of funds red, amber or green indicators for whether the account name and account numbers they have entered match.
That can help reduce fraud losses, but it also prevents people accidentally sending money to the wrong accounts.
Robertson said over 150 million confirmation of payee checks had been done since the system was launched in 2023.
Not everyone acts on a red warning indicator, however.
Robertson said 20% of people who get informed that the account name and number they have entered do not match, go ahead with the transaction anyway.