Money Mules: Latest Trend in Net Banking Fraud

chillibreeze writer — Kasturi De

Before the proliferation of the internet, the only mules that we knew were the beasts of burden. But now, with the increase in internet facilities, a new species of mules have come to light. Net banking, the birthplace of money mules, has been prevalent for a while now, but very few cases of fraud had been reported. Until now. Since 2004, numerous net banking money laundering cases have been recorded and the matter has attracted a lot of media attention.

Numerous techniques have emerged to launder money from innocent people through the internet. Some of these methods include phishing, hacking, spoofing, vishing, and skimming. Through these methods, the victim gullibly divulges his/her personal information such as account number, social security number, license details, bank details, credit card number, and passwords. The criminal use this information to withdraw funds from the victim’s account.

Enter money mules - people recruited by such criminals as middlemen to transfer funds obtained through online fraud. The term “money mules” has been inspired from “drug mules” - people who smuggle drugs across national borders.

How does it work?

Criminals contact web users via variety of methods such as fraudulent job e-mails, spam e-mails, recruitment sites, online chat rooms, press advertisements, and so on.
The criminal then convinces the victim to be employed by their fake company. Some fraudsters may ask victims to sign fraudulent contracts of employment.
Once the victim agrees, he becomes a money mule. After being recruited, money mules receive funds into their account that have been stolen by the criminal from other accounts.
Mules are then asked to deduct their commission payment (usually 10%) and transfer the rest of the funds electronically into an overseas account.

Net banking rackets have been fairly common in the United States and United Kingdom. However, in India, with a depressed job market and youngsters frantically on the lookout for jobs online, the incidence of internet banking frauds are on the rise. Recently, two Bangalore-based people were arrested who had served as money mules. A complaint had been filed in 2009 by a Tiruchi-based businessman that Rs. 26.55 lakh had been fraudulently transferred from his account through net banking.

Most of the mules fall into such traps unwittingly and do not know that acting as a money mule is a highly illegal activity. Even if they do know it, they assume they will not be caught because they aren’t directly involved. What they do not realize is that when such frauds are reported, the law enforcement agencies find the money mules easiest to track down because it is their bank accounts that have been used for the transactions.

How to recognize a money mule scam?
Money mule offers usually take a variety of different forms and may appear to be a genuine company website. The fraudsters may copy a website and register a similar web address for authenticity. Here are a few ways in which you can identify a money mule scam:

The mail or advertisement may be written in poor English and may have grammatical errors and spelling mistakes.
It may warn you not to inform your bank or the police regarding any transaction.
It may hunt for people with accounts with certain banks or internet payment systems.

How to avoid being involved?
Here are a few things that you should keep in mind:

Beware of mails and advertisements that offer the chance to make easy money or offer prizes.
Beware of financially assisting an unknown person, especially by wire transfer as these funds cannot be recovered by banks.
Do not respond to e-mails that ask you to divulge your personal details.
Ensure that you verify the identity and contact details of any job offered to you on the internet. Validate their address, telephone number, e-mail address, website and check if it is a registered company.
Never reveal your bank account information to unknown people.
In case you think you have been involved in a money mule scam, contact your bank immediately.

While law enforcement agencies such as cyber cells of the police are doing their best to put an end to such rampant net banking crimes, what we need is a better educated public. Consumers should remember not to divulge any personal information to any unknown person or on the internet. They should also review their bank accounts on a regular basis and question transactions that they do not remember making. Also people should be made aware of money mules and the hazards attached with it.

Chillibreeze's disclaimer: This is a contributed article and was published on Chillibreeze in March, 2010. The views and opinions expressed in this article are those of the author(s) and do not reflect the views of Chillibreeze as a company. Chillibreeze has a strict anti-plagiarism policy. Please contact us to report any copyright issues related to this article. The relevance of the facts and figures cited (if any) could change after a period of time.

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—About our writer:

Kasturi De has done her masters in Journalism and holds a diploma in Mass Communication. She had previously worked with a well-known Mumbai-based e-learning company. Post motherhood, she switched to freelance writing on a variety of topics. Daughter and wife of a defence officer, she has travelled to many cities within the country and loves the exposure it gives her.

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