Recent research has revealed that numerous UK universities accepting significant cash payments for tuition and accommodation fees might be inadvertently aiding money laundering activities.
Of the 110 universities that responded to a Freedom of Information (FoI) request, approximately 20% admitted to taking cash payments. Remarkably, in the academic year 2019-20, three of these institutions each accepted over £1 million in cash. While another 17 universities have ceased accepting cash during or after that same year, the combined cash transactions across the 39 universities amounted to £12 million.
The decision for many universities to phase out cash payments was influenced by a Times investigation which highlighted the associated risks. Despite this, a noteworthy number continue to accept them. Prof Nicholas Ryder from Cardiff University expressed concerns that several institutions have no upper limit for cash payments. He also emphasised that though accepting cash isn’t against the law, there is a notable lapse in how the UK’s anti-money laundering measures are enforced.
This extensive study, a joint venture by Cardiff University and the University of the West of England (UWE), also identified a lack of proper guidance about money laundering risks for both staff and students in many higher education institutions. The research displayed that a significant percentage of universities failed to notify authorities about suspicious activities. Shockingly, 20% of the respondent universities don’t offer any anti-money laundering training for their staff, and 24% don’t guide their students on financial crime risks.\
The study further highlighted an alarming trend of students becoming “money mules”. This involves allowing third parties to use their bank accounts for quick cash schemes, leading to a rise in students facing money laundering charges.
Prof Ryder stressed that criminal groups are exploiting universities and students to launder money. He added, “Many universities lack sturdy preventive measures, exposing staff and students to risks.” He suggested a more stringent legislative framework to safeguard universities, their staff, and students against the risks of money laundering and criminal implications.
The Department for Education and Universities UK commented “Universities collaborate with the government, police, and sector-related bodies to shield students and institutions from potential money laundering threats.”
