Fraud Alert: Money mule scam; how to safeguard your money from fraudsters

A money mule is someone who transmits or transports unlawfully obtained funds on behalf of another.
Criminals use money mules to launder revenues from internet scams and frauds, as well as crimes such as human trafficking and narcotics trafficking. Money mules provide layers of distance between crime victims and offenders, making it more difficult for law enforcement to correctly follow money traces.

Money mules can transfer money through a variety of channels, including bank accounts, cashier's checks, virtual currency, prepaid debit cards, and money service organisations.

Who is targetted by criminals?

Criminals often target students who are looking for part-time work or jobs, and people who are looking to date someone, however, anyone can be trapped in this scam.
 
Now, let's understand more about this scam from experts.

Mule account fraud: All you need to know

Shikhar Aggarwal, chairman of BLS E-Services, says, a mule account belongs to an innocent victim who was duped by fraudsters into laundering illegal money through it. As a result, the innocent victim becomes a target of investigation without their fault. On the other side, Amit Relan, co-founder and CEO, mFilterIt, explains, as per regulations of the National Payments Corporation of India (NPCI) and the Reserve Bank of India (RBI), Indian payment systems should not be used for blacklisted or banned website categories like gambling, pornographic sites, Forex trading sites, Chinese laundering/loan apps or on other restricted sites.  

To bypass this restriction, they use mule accounts to receive money via Indian payment instruments like bank accounts, credit cards, debit cards, UPI, or VPA.

How do fraudsters scam you?

Aggarwal: The Mule account customer is contacted by a fraudster electronically through email, website, social media, etc., and the customer gets falsely convinced that they will receive some money in their account through some incentive or commission. Then, the fraudster transfers illegal money into the mule account.

Relan: We detect 18 to 20 thousand cases every single day for a National Bank. These mule accounts are usually owned by regular people, who are either tricked into opening these accounts or knowingly use these accounts at the behest of some monetary payments.  

We advise people not to share their account details or give access to anyone. Fraudsters can use your credentials for such illegal activity. 

The fraudster then convinces the mule account customer to transfer the money to another mule account and thus starts a chain that ultimately results in the money reaching the fraudster account.

How to spot and safeguard your money from fraudsters?

Aggarwal: Always be skeptical about any unexpected communication, especially with lucrative offers. Scrutinise the demands carefully, and never share your account credentials with an unknown person.
 
Dhiren V. Dedhia, head of enterprise solutions, CrossFraud, says:
- Being watchful and prudent when disclosing personal or financial details is paramount.
- Protect your information by employing robust, distinct passwords for online accounts and activating multi-factor authentication whenever feasible.
- Cease engaging with unsolicited appeals for sensitive data, dubious emails or messages, and unexplained charges or withdrawals in your accounts.

How to protect your bank account from mule account fraud?

Aggarwal: Never respond to emails asking for your account details.
Always confirm the identity of the unknown person contacting you before further proceeding with the communication.
Never get lured by attractive offers for unauthorised funds.
 
Dedhia:
- Exercise caution when divulging your bank account details, refraining from sharing them with individuals or entities you don't trust.
- Routinely inspect your account transactions to promptly identify any indications of fraudulent behaviour.