Money Mule: Allowing Others To Use Your Bank Account For Online Transfer Can Be Dangerous | Online Safety Tips

Money Mule is a term used to describe innocent victims who are duped by fraudsters into laundering stolen / illegal money via their bank account (s). Money mules are recruited, sometimes unwittingly, by criminals to transfer illegally obtained money between different bank accounts.

Money Mules: With the rampant increase in digital payments, online frauds are also witnessing a sudden rise. Thus, in a bid to safeguard people and their money, RBI cautioned people on ‘money mules’. Money mules, according to a RBI notification, could be recruited by a variety of methods, including spam e-mails, advertisements on genuine recruitment websites, social networking sites, instant messaging and advertisements in newspapers.

What Is Money Mule? 

Money Mule is a term used to describe innocent victims who are duped by fraudsters into laundering stolen / illegal money via their bank account (s). Money mules are recruited, sometimes unwittingly, by criminals to transfer illegally obtained money between different bank accounts.

How Does Money Mule Happen?

• Fraudsters contact customers via emails, social media, etc., and convince them to receive money into their bank accounts (money mule), in exchange for attractive commissions.
• The money mule is then directed to transfer the money to another money mule’s account, starting a chain that ultimately results in the money getting transferred to the fraudster’s account.
• Alternatively, the fraudster may direct the money mule to withdraw cash and hand it over to someone.
• When such frauds are reported, the money mule becomes the target of police investigation for money laundering.

Precautions to be Taken

• Do not allow others to use your account to receive or transfer money for a fee/payment.
• Do not respond to emails asking for your bank account details.
• Do not get carried away by attractive offers/commissions and give consent to receive unauthorised money and to transfer them to others or withdraw cash and give it out for a handsome fee.
•  If the source of funds is not genuine, or the rationale for underlying transaction is not proved to authorities, the receiver of money is likely to land in serious trouble with police and other law enforcement agencies.

Approximately 80,000 frauds worth Rs 200 crore are committed via UPI every month, with 50% of financial frauds committed on UPI alone through various mechanisms like luring customers to make payment to unauthorized QR to install malware and compelling the customer use the unauthorized app, an Economic Times report said.