With the pandemic disrupting people’s finances, the financially vulnerable are increasingly at risk of being targeted by money mule recruiters or herders.
As part of this type of scam, individuals are tricked into laundering stolen money through their bank accounts by fraudsters posing as prospective employers, prize giveaway organisers and sometimes romantic suitors.
Typically, fraudsters send money to the potentially unwitting mule, asking them to send some, or all of it, onto someone else, thereby cleaning it and creating more distance between the crime and the eventual withdrawal of cleansed money.
Obviously, the fraudsters do not tell the mules about the origins of the money and often disappear just as quickly as they arrived on the scene. The mule may even be implicated in the original crime.
Spotting the scams
But what are the tell-tale signs of a money-mule scam? There are many ways fraudsters can be spotted and thwarted, including:
- They need access to your bank account
For the money mule scam to work, fraudsters need to access or be able to use your bank account. If anyone asks for your bank details or your online banking credentials under suspicious circumstances, refuse. This applies to a recent love interest or a competition official asking you to send a small amount of money to release a prize or an employer asking for your help conducting a ‘business’ transaction.
- They’ll offer you easy money
Fraudsters may offer an incentive in order to get you to funnel their funds. If someone is offering to pay you, or let you have a share of the money they have asked you to pass on to a third party, it’s likely a money mule scam. If it seems too good to be true, then it probably is. The question ‘why am I being asked to do this?’ is a good starting point in this situation.
- You might be asked to open an account on someone else’s behalf
Fraudsters posing as prospective employers may ask you open a bank account on behalf of a third party or a, probably fake, business so they can channel funds into the new account. This is a clear sign of money laundering.
- They may pose as a charity or a personal protective equipment company
Some scams appeal to people’s good nature so be wary if you’re asked to channel funds by a purported charity or a provider of PPE. Fraudsters often target small businesses as well as individuals with this type of scam.
Banks are playing their part
It’s especially important that banks play their role in disrupting money mule networks or herds as the funds involved can be funnelled into more serious crimes such as terrorism and people trafficking. The UN estimates that between USD800 billion and USD2 trillion is laundered globally each year.
Part of the challenge is working smarter and staying one step ahead of the bad guys. At Standard Chartered, we use technology to help us make the most of our data, with advanced analytics used to identify money mules. By using advanced fraud prevention tools, we are able to analyse large amounts of data to help us uncover the connections between fraudsters and money mules in real time. This is one more weapon in the fight against financial crime and has helped us improve our efficiency and consistency in fraud detection.
However, it is equally important to work closely with other banks, governments and law enforcement agencies. Information sharing between public bodies and private organisations can be effective in helping identify and disrupt mule herds spread across several financial institutions and is much more effective than working alone. This is because everyone has a role to play in strengthening the financial system.
To prevent people or companies from being used as money mules it is not simply a case of individuals and corporates remaining more vigilant, we need to ensure we make the most of the data and tools at our disposal, as well as find effective ways to collaborate to tackle the problem. Let’s do this together.