How South African money mules are used to clean out online bank accounts

The South African Fraud Prevention Service (SAFPS) recently issued a statement alerting the public to the dangers of being recruited as a “money mule”.

“Money mules” are people whose bank accounts are used by others as a means of making payments invisible or accessing stolen funds.

In return for using their bank accounts, fraudsters pay them large sums of money for their services.

The poor are especially vulnerable to this type of recruitment due to the offer of a quick payment.

These mules are recruited either knowingly or unknowingly, although their actions do make them complicit in a criminal act.

“Money mules” in South Africa

SAFPS operations manager Roy Retief told MyBroadband that South Africa is experiencing an increase in money mule activity, similar to international trends.

“We saw an increase of 58% in the abuse of bank account subcategory listings, as reported by members during 2017,” Retief said.

“Prior to November, we did not have a dedicated subcategory for the reporting of money mule activity, so the figure may include some other elements of bank account abuse.”

He said that this does not necessarily translate to an increase of 58% in money mule activity, but rather that the organisation’s members are increasingly filing these records on the fraud prevention database.

“This is supported by conversations with member organisations where they are seeing increased incidents of money muling, and are now reporting muling to us, which they may not have done in the past,” Retief said.

Laundering stolen funds

Money mules are often used after phishing and SIM-swap fraud attacks have given a criminal access to a person’s bank account, and the money must be sent somewhere so the criminal can access it.

“The phishing and SIM-swapping are essentially the methods used to gain access to the consumers’ bank accounts, whereas the muling is the method employed to launder the proceeds of these crimes,” Retief said.

He added that a reason for using money mules is that criminals would not want to use, or might not have, their own bank accounts.

“Muling is also used to split up the initial fraudulent amount into multiple smaller amounts, which make investigating the flow of funds more complicated, and also make it easier to convert the proceeds to cash, if this is required,” Retief said.

He added that this makes it harder for authorities to determine who the criminals are, as their identities remain obscure.

“Money mules rarely know the true identities of the people that recruit them (known as herders) and are usually unable to track them down during subsequent investigations.”

Now read: Why Standard Bank security software shows online banking as “unprotected”

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How South African money mules are used to clean out online bank accounts