Don’t Become a Money Mule: Your Guide to this Financial Scam

What if someone offered you Rs.500 a week just to receive and forward payments through your bank account? Sounds too good to be true? That’s because it is – and it’s one of the fastest-growing financial scams targeting ordinary people.

Scamsters utilise mule accounts to launder money or carry out other illegal actions without the culprits being personally involved. We’ll look at what mule accounts are, how they operate, and why they pose such a risk to people and companies in this blog.

What is a Money Mule?

Money mules are people who transfer or “mule” money from one account to another on behalf of others, as part of a scam or illegal activity. A money mule receives funds to their account and then transfers them to another account, typically for a fee or a false promise of rewards. While some people volunteer to participate in these schemes, many get tricked into participating in the crime.

Consider this: You receive what appears to be a genuine job offer for a finance assistant position. The role seems simple – helping a company process international payments. What you don’t realize is that you have become a money mule and are a part of a complex money laundering operation.

Mule accounts are typically involved in money laundering schemes, where stolen funds are funneled through several accounts to obscure their origin, making it harder for authorities to trace the transactions back to the criminal activities. These accounts can also be used in scams, including phishing schemes, lottery frauds, or investment frauds, where victims are tricked into sending money to these accounts.

How Fraudsters Build their Network

Money mule networks are operations where criminals carefully orchestrate transactions between victims and mules while maintaining their anonymity. At the helm are “mule controllers” or “recruiters” who coordinate these intricate webs of deception.

How do Mule Controllers Operate?

1. Recruitment: Fraudsters identify potential mules through direct contact, ads offering “easy money” or fake job opportunities, or social media. These seem like legitimate opportunities at first glance but are designed to manipulate individuals to become mules.
2. Fund Collection: Once the mule account is set up, the funds – often originating from scams, fraud, or stolen credit cards  – are deposited into the mule’s account. This can happen through wire transfers or online payments methods.
3. Money Movement: The fraudster may then instruct the mule to transfer the money to another account or a cryptocurrency wallet, often across international borders. In some cases, mules are made to convert the money into a different currency or even purchase items to be sent to another location.
4. Covering Tracks: By passing the money through a series of mule accounts, criminals make it harder for investigators to trace the illicit funds. The goal is to create a confusing trail of financial transactions that make it difficult to identify the source and destination of the money.

How do Fraudsters Recruit Mules?

Fraudsters often target people who may be financially vulnerable or looking for easy ways to make money. Some common recruitment tactics include:

• Fake Job Offers: Scammers often advertise fake jobs, especially for remote or work-from-home opportunities. These jobs promise easy money or commission-based income for minimal effort. Once the victim accepts, they’re asked to open a bank account to receive and transfer funds.
• Investment and Lottery Scams: Fraudsters lead victims to believe they’ve won a lottery or discovered an investment opportunity. The victim is then instructed to set up an account to receive funds, which is then used for fraudulent purposes.
• Emergency Scenarios: Some fraudsters exploit fear and urgency, claiming the victim owes them money and they will face serious consequences unless they cooperate and aid transfer of funds.

The Risks and Consequences of Being a Mule 

While some people volunteer to be money mules, many others become involved unwittingly. However, regardless of intent, being associated with mule accounts can have serious consequences:

1. Legal Consequences

• Criminal charges for money laundering and fraud
• Potential prison time
• Bank account closure and financial service restrictions

2. Financial Loss

• Loss of personal funds
• Legal defense costs
• Potential fines and penalties
• Long-term damage to credit rating

How to Avoid Money Mule Scams

• Avoid interacting with unknown individuals online
• Do not open a bank account on someone else’s behalf
• Do not lend your debit card, passbook or mobile banking app password to anyone
• Frequently change your mobile banking password
• Do not accept job offers that require transfer of money to other unknown accounts
• Do not allow others to use your account to receive or transfer money
• Do not accept any award money that requires you to transfer a part of it elsewhere
• Do not share OTP or login credentials such as CVV, password etc .
• Beware of unrealistic offers, cheap deals and discounts. 

• Regularly check your account transactions and report any unusual activity to banks immediately.
• Follow communications from banks through SMS/Email/IVR for latest updates

How to raise an issue on PhonePe if you suspect you are part of a Money Mule scam 

In case you have been duped by a fraudster via PhonePe, you can immediately raise the issue in the following ways:

1. PhonePe app: Go to the Help section and raise an issue under “have an issue with the transaction” option.
2. PhonePe Customer Care Number: You can call PhonePe customer care on 80–68727374 / 022–68727374 to raise an issue, post which the customer care agent will raise a ticket and help with your issue.
3. Webform submission: You can also raise a ticket using PhonePe’s webform, https://support.phonepe.com/
4. Social media: You can report fraudulent incidents via PhonePe’s social media handles

Twitter — https://twitter.com/PhonePeSupport

Facebook — https://www.facebook.com/OfficialPhonePe

5. Grievance: To report a grievance on an existing complaint, you can login to https://grievance.phonepe.com/ and share the ticket ID previously raised.
6. Cyber cell: Lastly, you can report fraud complaints at the nearest Cyber Crime cell or register a complaint online at https://www.cybercrime.gov.in/ or contact the Cyber Crime Cell helpline at 1930.
7. DOT: If a digital crime has not occurred, but you are suspicious of it, make sure you report it anyway. The Department of Telecommunications has launched a Chakshu facility on the Sanchar Saathi portal (sancharsaathi.gov.in), where one can report messages, calls, and WhatsApp accounts if they suspect them to be fraudulent.