Throughout the turmoil of the last few years, the financial industry has seen a large uptick in activity from scammers and fraudsters. Although these tricks and scams continue to change and evolve in their complexity, there are many ways for us to defend against them. One of our best defense tactics is awareness. The more we are aware, the easier these scams are to identify.
Today I want to talk about one form of fraudulent activity that is becoming more and more active in the banking world: money mules. If you aren’t familiar with this term, the Federal Trade Commission (FTC) describes a money mule as someone who knowingly (or unknowingly) transfers stolen money on behalf of a thief. Per the FTC, here is the gist of the scam: Money mule scams happen in several ways. The story often involves scams related to online dating, work-at-home jobs, or prizes. Scammers send money to you, sometimes by check, then ask you to send (some of) it to someone else. They often want you to use gift cards or wire transfers. Of course, they don’t tell you the money is stolen and they’re lying about the reason to send it. And there never was a relationship, job, or prize. Only a scam.
You can see how it can be very easy for people to fall into one of these money mule traps. But they are also very easy to spot if you know what you are looking for. The Federal Bureau of Investigation (FBI) has laid out these steps that will help you identify warning signs, protect yourself, and report them to the proper authorities.
Signs You May Be Acting as a Money Mule
- You received an unsolicited email or contact over social media promising easy money for little to no effort.
- The “employer” you communicate with uses web-based email (such as Gmail, Yahoo, Hotmail, or Outlook).
- You are asked to open a bank account in your own name or in the name of a company you form to receive and transfer money.
- As an employee, you are asked to receive funds in your bank account and then “process funds” or “transfer funds” via a wire transfer, ACH, mail, or money service business (such as Western Union or MoneyGram).
- You are allowed to keep a portion of the money you transfer.
- Your duties have no specific job description.
- Your online companion, whom you have never met in person, asks you to receive money and, subsequently, forward the funds to an individual you do not know.
How to Protect Yourself
- A legitimate company will not ask you to use your own bank account to transfer their money. Do not accept any job offers that ask you to do this.
- Be wary when an employer asks you to form a company in order to open up a new bank account.
- Never give your financial details to someone you don’t know and trust, especially if you met them online.
- Be wary when job advertisements are poorly written with grammatical errors and spelling mistakes.
- Be suspicious when the individual you met on a dating website wants to use your bank account for receiving and forwarding money.
- Perform online searches to check the information from any solicitation emails and contacts.
- Ask the employer, “Can you send a copy of the license/permit to conduct business in my county or state?”
How to Respond
- If you have received solicitations of this type, do not respond to them and do not click on any links they contain. Inform your local police or the FBI.
- If you believe that you are participating in a money mule scheme, stop transferring money immediately and notify your bank, the service you used to conduct the transaction, and law enforcement.
As you can see, there are many signs that you are the target of a money mule scam, but if you don’t educate yourself, or those around you, then you are opening the door to potentially being taken advantage of. I hope that you all remain vigilant and aware of these types of scams – YOU are our best line of defense.