The term ‘money mule’ is currently in news as HDFC Bank has reported a case of illegal transfer of funds by a customer to an overseas account and a complaint in this regard has been lodged with the cyber crime cell of the Mumbai Police. Few other banks have also noticed instances of fraudsters based overseas, posing as global payment companies, luring gullible people into joining them as ‘money transfer agents’ and using their bank accounts to route ill-gotten money. The incidence of Nigerian scam through e-mail has already augmented in India. So let us understand what money mule is all about.
What is a money mule?
As per Wikipedia, a money mule is a person who transfers money and reships high value goods that have been fraudulently obtained in one country, usually via the internet, to another country, usually where the perpetrator of the fraud lives. The term money mule is formed by analogy with drug mules i.e. drug smugglers. Such frauds are quite rampant in UK and USA.
Money mule, Why?
Fraudsters belonging to a particular country obtain the credit card numbers, bank account numbers, passwords and other financial details of a victim living in another country via internet through techniques such as malware and phishing but find it difficult to turn those details into use in their own country. Many businesses will refuse to transfer money or ship goods to certain countries where there is a high likelihood that the transaction is fraudulent. The fraudster therefore recruits a money mule in the victim's country who will receive money transfers and merchandise and resend them to the criminal in return for a commission.
How it works?
Money mules are recruited by a variety of methods, including spam emails, advertisements on genuine recruitment web sites/newspapers, approaches to people with their CVs available online, instant messaging etc. Jobs are usually advertised as a ‘financial manager’ and suggest that no special knowledge is required. Hackers steal bank account details of an unwary customer by methods such as phishing and transfer the money to some account, which belongs to the hacker. They then try to recruit money mules by sending them spam emails, news letters, snail mails, by advertising in news papers or online job websites and using chat rooms. Hackers and fraudsters pose as financial managers or other top level functionaries and make it clear that no special knowledge or skill set is required for the job and it is a very easy money making opportunity involving just transfers of funds.
To gain credibility, the hackers even get 'official looking' contracts signed by the mules and convince that they are a part of international company. After a successful 'recruitment', the details of money mule's bank account are obtained and funds are transferred by fraudsters to mule's bank account. The mules are then asked by the fraudsters to transfer these funds to some overseas bank account and mules are compensated with some 'commission' for this service. Subsequently, the overseas fraudsters close their account and disappear. Even though the mule has nothing to do with the actual extraction of funds from another person's account, by allowing his/her account to be used to receive and transfer such funds, one will be acting illegally.
How to identify a money mule advertisement?
Money mule advertisements or offers can take a variety of different forms and they may even copy a genuine company's web site and register a similar web address to add authenticity to the scam. These advertisements will normally state that they are an overseas company seeking ‘representatives’ or ‘agents’ to act on their behalf for a period of time, sometimes to avoid high charges for making payments, or local taxes. The advertisements may be written in poor english with grammatical and spelling mistakes and they may urge the receiver not to inform the bank or the police about the reason for making the payments. The advertisements may seek people with accounts at certain banks or Internet payment systems.
How to avoid becoming a money mule?
• Be wary of offers from people or companies overseas. Take steps to verify any company which makes you a job offer and check their contact details (address, phone number, email address and web site) are correct and whether they are registered in that particular country.
• Be wary of any unsolicited offers or opportunities for work or offering you the chance to make some easy money, especially if the company is based overseas.
• Verify the details of any company that you are dealing with and never give your bank account details to someone you do not know or trust.
• Contact your bank immediately if you think that you may have become involved in a money mule scam.
Indian scenario:
Recently, RBI had issued a warning to the public not to fall prey to fictitious offers for release of cheap funds claimed to have been remitted by overseas entities to banks in India or RBI. It also had urged members of the public not to make any remittance towards participation in such schemes or offers from unknown entities. Soon after, the case of HDFC Bank came to the lime light. HDFC Bank had noticed instances of money mule activity and got one of its customers, who was a victim of phishing, to file a police complaint and also helped the police nab another accountholder who was recruited as a money mule by some overseas fraudster. Other private sector banks have also detected that some of their accountholders were acting as money mules for inward and outward transfers of fraudulently obtained money. According to the bankers, India is all set to become a popular destination of such fraudsters because of the liberalisation of capital inflows and outflows.
Money mule scam has put bankers on alert. Banks have decided to sensitise their customers against phishing and money mules. At a recently held meeting at the Indian Banks’ Association (IBA), major banks, including ICICI Bank and HDFC Bank, have decided to send communications to customers in this regard. According to the participants of the meeting, “Banks will post advisories on their websites. It is very important as gullible people are being duped. An individual acting as a money mule is breaching the law unknowingly and could be booked for money laundering.”
How to check money mule activity?
The Indian Banking sector has to take safe guard against the latest import from abroad i.e. money mule activity. As already mentioned, the campaign for sensitising the customers should be taken up aggressively. Similarly, there is the need to check phishing activities, as it is the root of all these cyber scams. In the United Kingdom, a phishing awareness campaign, Bank Safe Online, has been launched by a consortium of British banks. The initiative, which is managed by the Association for Payment Clearing Services or APACS, has zeroed in on the money mule scam, issuing stern warnings about the fake jobs and the risks involved with reshipping and laundering money. In India, similar steps may be taken by the banks. More over, as a preventive measure, stringent regulation on the cyber cafes should be introduced as fraudsters use these cafes for phishing activities. Awareness along with vigilance will definitely help in checking money mule activity.
What is a money mule?
As per Wikipedia, a money mule is a person who transfers money and reships high value goods that have been fraudulently obtained in one country, usually via the internet, to another country, usually where the perpetrator of the fraud lives. The term money mule is formed by analogy with drug mules i.e. drug smugglers. Such frauds are quite rampant in UK and USA.
Money mule, Why?
Fraudsters belonging to a particular country obtain the credit card numbers, bank account numbers, passwords and other financial details of a victim living in another country via internet through techniques such as malware and phishing but find it difficult to turn those details into use in their own country. Many businesses will refuse to transfer money or ship goods to certain countries where there is a high likelihood that the transaction is fraudulent. The fraudster therefore recruits a money mule in the victim's country who will receive money transfers and merchandise and resend them to the criminal in return for a commission.
How it works?
Money mules are recruited by a variety of methods, including spam emails, advertisements on genuine recruitment web sites/newspapers, approaches to people with their CVs available online, instant messaging etc. Jobs are usually advertised as a ‘financial manager’ and suggest that no special knowledge is required. Hackers steal bank account details of an unwary customer by methods such as phishing and transfer the money to some account, which belongs to the hacker. They then try to recruit money mules by sending them spam emails, news letters, snail mails, by advertising in news papers or online job websites and using chat rooms. Hackers and fraudsters pose as financial managers or other top level functionaries and make it clear that no special knowledge or skill set is required for the job and it is a very easy money making opportunity involving just transfers of funds.
To gain credibility, the hackers even get 'official looking' contracts signed by the mules and convince that they are a part of international company. After a successful 'recruitment', the details of money mule's bank account are obtained and funds are transferred by fraudsters to mule's bank account. The mules are then asked by the fraudsters to transfer these funds to some overseas bank account and mules are compensated with some 'commission' for this service. Subsequently, the overseas fraudsters close their account and disappear. Even though the mule has nothing to do with the actual extraction of funds from another person's account, by allowing his/her account to be used to receive and transfer such funds, one will be acting illegally.
How to identify a money mule advertisement?
Money mule advertisements or offers can take a variety of different forms and they may even copy a genuine company's web site and register a similar web address to add authenticity to the scam. These advertisements will normally state that they are an overseas company seeking ‘representatives’ or ‘agents’ to act on their behalf for a period of time, sometimes to avoid high charges for making payments, or local taxes. The advertisements may be written in poor english with grammatical and spelling mistakes and they may urge the receiver not to inform the bank or the police about the reason for making the payments. The advertisements may seek people with accounts at certain banks or Internet payment systems.
How to avoid becoming a money mule?
• Be wary of offers from people or companies overseas. Take steps to verify any company which makes you a job offer and check their contact details (address, phone number, email address and web site) are correct and whether they are registered in that particular country.
• Be wary of any unsolicited offers or opportunities for work or offering you the chance to make some easy money, especially if the company is based overseas.
• Verify the details of any company that you are dealing with and never give your bank account details to someone you do not know or trust.
• Contact your bank immediately if you think that you may have become involved in a money mule scam.
Indian scenario:
Recently, RBI had issued a warning to the public not to fall prey to fictitious offers for release of cheap funds claimed to have been remitted by overseas entities to banks in India or RBI. It also had urged members of the public not to make any remittance towards participation in such schemes or offers from unknown entities. Soon after, the case of HDFC Bank came to the lime light. HDFC Bank had noticed instances of money mule activity and got one of its customers, who was a victim of phishing, to file a police complaint and also helped the police nab another accountholder who was recruited as a money mule by some overseas fraudster. Other private sector banks have also detected that some of their accountholders were acting as money mules for inward and outward transfers of fraudulently obtained money. According to the bankers, India is all set to become a popular destination of such fraudsters because of the liberalisation of capital inflows and outflows.
Money mule scam has put bankers on alert. Banks have decided to sensitise their customers against phishing and money mules. At a recently held meeting at the Indian Banks’ Association (IBA), major banks, including ICICI Bank and HDFC Bank, have decided to send communications to customers in this regard. According to the participants of the meeting, “Banks will post advisories on their websites. It is very important as gullible people are being duped. An individual acting as a money mule is breaching the law unknowingly and could be booked for money laundering.”
How to check money mule activity?
The Indian Banking sector has to take safe guard against the latest import from abroad i.e. money mule activity. As already mentioned, the campaign for sensitising the customers should be taken up aggressively. Similarly, there is the need to check phishing activities, as it is the root of all these cyber scams. In the United Kingdom, a phishing awareness campaign, Bank Safe Online, has been launched by a consortium of British banks. The initiative, which is managed by the Association for Payment Clearing Services or APACS, has zeroed in on the money mule scam, issuing stern warnings about the fake jobs and the risks involved with reshipping and laundering money. In India, similar steps may be taken by the banks. More over, as a preventive measure, stringent regulation on the cyber cafes should be introduced as fraudsters use these cafes for phishing activities. Awareness along with vigilance will definitely help in checking money mule activity.
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