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.
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:
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.
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:
But what is money muling? Scammers use a number of different strategies to recruit mules and move money undetected, including:
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.
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:
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:
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:
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 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:
People who transfer stolen money on behalf of other people, usually through their own bank account.
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".
Stop any money transfers immediately; notify their bank or payment provider; seek legal advice; report it to the authorities.
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