A mule account is a bank account that receives and transfers funds acquired illegally on behalf of others, sometimes without the knowledge of the account holder.

How it works?

1. Scammers will contact potential victims via email or social media.
2. They will then pursue victims, promising rewards in exchange for using the victims’ bank accounts or ATM cards.
3. Scammers will then transfer illegal money into the victims’ bank accounts which at this point become mule accounts.
4. Victims are then instructed to transfer the money into another mule account.
5. When fraud is detected, the mule account holder will become the target of the authorities and investigation. The scammer vanishes without a trace.

Risks of being a mule account holder

• Fined, jailed for 5 years or both (Section 424 of the Penal Code)
• Blacklisted by banks and other financial institutions
• Unable to open other financial accounts in the future

Red Flags to watch out for to avoid becoming a money mule

• High-value transaction values
• Overly-lucrative offers
• Deposits or withdrawals are form or to overseas bank accounts
• Require extremely sensitive bank account details (Login ID, Password, PIN number etc.)

Types of money mule scams

• Job Scams
  • Account holders are promised a lucrative job offer that requires the sharing of their bank details to either perform their duties or receive monetary rewards.
• Romance Scams
  • Account holders are romantically enticed into allowing scammers to use their bank accounts with the promise of romance.
• Investment Scams
  • Account holders are offered monetary rewards in exchange for allowing scammers to use their bank account for their “business transactions”.
• Impersonation Scams
  • Pretending to be either famous people in need, scammers pursue account holders to allow them to use their bank accounts with the promise of returning the favour in the future.

This article first appeared on The Star.