Financial and organised scams continue to rise as both people and the technology they utilise become more sophisticated in their efforts - bombarding consumers, businesses and financial services with scams, synthetic identities, money muling activity, automated bots and application fraud.
More and more consumers and businesses are falling victim to rising scam attacks, which is why it is important to become aware of these methods to prevent personal and financial harms.
In this article we will take a closer look at what money muling is, how it works, how people are enticed into it and what people should do if they fall victim to this type of activity.
What is a Money Mule?
Money mules are people who transfer stolen money on behalf of other people - usually through their own bank account.
Criminals and fraudsters contact people to offer them cash to receive money into their bank account, and then transfer those funds into another account. Scammers often prey on those who are low on funds to act as their money mules.
Individuals falling victim to money muling activity are often enticed by:
- Confidence fraud/romance fraud
- Employment scams
- Non-payment/non-delivery scams
- Lottery scams
- Or through any number of internet-enabled scams
Money mules - whether knowing or unknowing - are vital players in facilitating various types of financial fraud, including online scams, cybercrime, phishing scams and money laundering overall.
The Mechanics of Money Muling
Money muling isn’t an instantaneous scam. Scammers - or money herders - have fine tuned their efforts to attract both unsuspecting and complicit money mules.
The common process involved in money muling is:
- Recruitment: Fraudsters usually recruit their money mules through numerous channels, including social media, online forums or job sites/listings. A Money mule is usually enticed with promises of easy money and minimal effort; work from home roles and shipping agent offers are the most common ‘job’ offers within money mule operations.
- Money transfer: When a money mule has been recruited, they are instructed to receive funds into their e-wallets or via their bank accounts. Unfortunately, this money is often stolen from unsuspecting victims
- Cash out: A money mule’s primary role is to withdraw the funds and then send them onto fraudsters - usually through untraceable methods like money transfer services or cryptocurrency
But what is money muling? Scammers use a number of different strategies to recruit mules and move money undetected, including:
- Online job advertisements: Criminals often use online platforms to recruit money mules by offering easy and quick ways to make money.
- Social media approaches: Criminals may approach individuals on social media platforms, posing as legitimate companies or individuals. They may lure potential money mules with promises of easy money or work-from-home opportunities.
- Romance scams: Criminals may exploit romantic relationships to recruit money mules. They often target vulnerable individuals looking for love and use them to move illicit funds.
- Money transfer requests: Money mules are frequently asked to receive and transfer funds on behalf of someone else. These requests may come from strangers or individuals they have met online.
The Consequences of Being a Money Mule
Individuals are often enticed into providing mule accounts under false pretences of low risk and easy money, such as through fake cash jobs.
If someone gets caught up in a money mule scam,they may be laundering criminal funds to be fund serious organised crime, which could get them a criminal record if they are caught.
Punishment for this type of activity can often include fines, reputational damage and even imprisonment.
Detection and Prevention
But how do money mules get caught?
Today, financial institutions and law enforcement agencies utilise various techniques to detect and apprehend money mules. These include:
- Sophisticated monitoring systems
- Transaction analysis
- Collaboration between international authorities
If a money mule’s bank account has unusual financial activities, large cash deposits or transfers and patterns that match typical money mule behaviour, it will likely trigger investigations through the multiple red flags.
It is vital that money muling is deterred, and to do so, individuals need to be aware of the risks associated with becoming a money mule and to report any suspicious activity to the authorities.
Financial institutions play a vital role in detecting and preventing money mule activity through robust anti-money laundering measures and enhanced due diligence procedures.
There are several ways people can avoid falling victim money muling scams:
- Always be suspicious of the promise of money in exchange for moving funds through bank accounts: Trustworthy companies would never ask customers to do this. Always be aware of job adverts promising high financial reward for minimal effort - if it sounds too good to be true, it’s likely to be a scam
- Bank account holders should never open a bank account for anyone else in their own name: They should also never let someone use their bank account to send and receive funds. And of course, they should never disclose sensitive informations, such as their PIN, passwords or passcodes.
- Further research into advertised jobs: Is the job ad genuine? Are their contact details legitimate? Are there online reviews for their services or products? Do they have a website? With some simple due diligence, it is possible to get a good sense as to whether the opportunity is real or not.
- Be careful of adverts from overseas as it can be hard to check if they're legitimate: Different countries have different safeguarding methods, which can make it near impossible to check the validity of companies overseas
What Should Someone Do if They Fall Victim to Money Muling?
According to Europol data, in 2023, “more than 90% of money mule transactions identified through the European Money Mule Actions are linked to cybercrime.
“The illegal money often comes from criminal activities like phishing, malware attacks, online auction fraud, e-commerce fraud, business e-mail compromise (BEC) and CEO fraud, romance scams, holiday fraud (booking fraud) and many others.”
If a customer suspects they have been caught up in a money mule scam or money laundering scheme, advise them to:
- Stop transferring money immediately
- Notify their bank or payment provider
- Seek legal advice
- Report it to the authorities
If someone finds themselves caught up in a money mule scam, it is important to act promptly and report it to the authorities to minimise potential consequences and legal repercussions.
By doing this, they will not only help themselves, they could also help prevent other people from becoming money mules and even help catch the criminals.
In Summary
In a digital world, people and businesses alike need to be more conscientious of potential financial scams that can be damaging on a financial and personal level.
The key takeaways to remember are:
- The money mule definition: People who transfer stolen money on behalf of other people, usually through their own bank account
- Scammers will target a money mule (whether unsuspecting or a complicit money mule) through: online job advertisements; social media approaches; romance scams; money transfer requests
- To avoid falling victim to a money mules scheme, be alert of any advertisements or request that sound too good to be true - because they likely are
- If there is any suspicion someone has been caught up in a money mule scam, it is best to report fraudulent activity to the authorities quickly
FAQs
What is a money mule?
People who transfer stolen money on behalf of other people, usually through their own bank account.
How do banks detect money mules?
To detect money mules, banks utilise a multifaceted metrics approach. They will utilise various metrics, gathering information during the customer onboarding process and then, once onboarded, monitor transactions and device metrics to spot potential mules.
What is another name for a money mule?
A money mule is sometimes called a "smurfer".
What should people do if they suspect they have been involved in money muling?
Stop any money transfers immediately; notify their bank or payment provider; seek legal advice; report it to the authorities.
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