Portals and Rails, a blog sponsored by the Retail Payments Risk Forum of the Federal Reserve Bank of Atlanta, is intended to foster dialogue on emerging risks in retail payment systems and enhance collaborative efforts to improve risk detection and mitigation. We encourage your active participation in Portals and Rails and look forward to collaborating with you.
Federal Reserve Web Sites
Other Bank Regulatory Sites
July 08, 2013
Money Mules: Unwitting Accomplices?
Recent news articles about the two major ATM cash-out frauds that yielded $45 million for the perpetrators have noted a critical element of the global crime—the extensive network of criminals that performed thousands of cash withdrawals over a few hours at ATMs in approximately 24 countries. Known as "money mules," these individuals help transport or launder stolen money and merchandise in exchange for a small share of the ill-gotten gains.
The mules in the ATM cash-out scheme were willing participants, but in many cases, individuals serving the role of a money mule may not be aware of their criminal involvement and may even themselves become victims of fraud. The most common tactics for enlisting the help of unknowing money mules are posting work-at-home advertisements on major legitimate employment websites, purchasing pop-up ads, or sending e-mails.
Earlier recruiting efforts were easy to spot because they often used poor grammar or spelling, were not specific in describing the job, and usually based the hiring company outside the United States. More recently, recruitment efforts have used well-written ads with high-quality graphics. These ads often stress the convenience of the position for the worker and the significant earnings potential. When hired, the individual is sometimes engaged as a mystery shopper or in some similar function to make the transfer of money or goods seem normal to the business operation. Some schemes initially engage the person in conducting legitimate transactions with the goal of developing a level of comfort for the individual with the process and the promise of bigger, more lucrative transactions to come in the future.
As with many crimes involving multi-level organizations, it is not the masterminds but the money mules who are most often apprehended. They are the ones whom law enforcement officers can locate relatively easily because they are the ones who provide their financial account information or shipping address as part of the transaction. Unknowing money mules risk criminal prosecution, financial loss, and smearing of their reputations. It’s also possible that they will themselves experience identity theft or fraud against their financial accounts because they may have provided sensitive personal information during the recruitment process.
As cybercrimes continue to spread, the mule recruitment efforts will expand and probably become more sophisticated. Individuals must exercise safer computer security practices, and financial institutions, consumer protection agencies, and law enforcement must continue to provide education about this type of scheme to help increase everyone’s ability to detect such fraud. Not only will early detection help prevent individuals from becoming unwilling victims, but also it will aid in the investigation of these criminal efforts by law enforcement.
Brian Krebs (KrebsonSecurity) has a good article, which includes a money-mule training video, providing more information about this type of crime to help individuals avoid getting caught up in one of these schemes. We welcome your suggestions on how the educational effort can be strengthened.
By David Lott, a retail payments risk expert in the Retail Payments Risk Forum at the Atlanta Fed
TrackBack URL for this entry:
Listed below are links to blogs that reference Money Mules: Unwitting Accomplices?:
- Consumer Prepaid Protections May Be Catching Up with Prepaid Use
- Virtual Currency Environment Still Fluid after Latest Rulings
- ISO 20022 in the United States: What, When, Why, and How?
- Let's Talk Tokens, Part III: What Problem Does Tokenization Solve?
- Mobile Biometrics: Ready or Not, Here They Come
- Starting Off on the Right Note with Mobile Enrollment
- Let's Talk Token, Part II: Distinguishing Attributes
- New ACH Return Rate Threshold on the Horizon
- Let’s Talk Token: Authenticating Payments
- Seeking a Successful Biometric Solution
- November 2014
- October 2014
- September 2014
- August 2014
- July 2014
- June 2014
- May 2014
- April 2014
- March 2014
- February 2014
- account takeovers
- ATM fraud
- bank supervision
- banks and banking
- card networks
- check fraud
- consumer fraud
- consumer protection
- cross-border wires
- data security
- debit cards
- emerging payments
- financial services
- identity theft
- law enforcement
- mobile banking
- mobile money transfer
- mobile network operator (MNO)
- mobile payments
- money laundering
- money services business (MSB)
- online banking fraud
- payments risk
- payments study
- payments systems
- phone fraud
- remotely created checks
- risk management
- Section 1073
- social networks
- third-party service provider
- trusted service manager
- Unfair and Deceptive Acts and Practices (UDAP)
- wire transfer fraud
- workplace fraud