In recent years, money muling has emerged as a growing threat world-wide. For instance, in 2023 alone, criminals laundered $3.1 trillion through the global financial system, and as much as 2% and 5% of global GDP is estimated to be laundered every year. Not only that, criminals have started recruiting teens. To get a better sense of what money muling is and how to combat it, we sat down for a chat with Valerija Jerenkevič, Fraud Manager at ConnectPay.
For those unfamiliar with the term, “money muling” is a type of money laundering, whereby a person – a “money mule” – receives funds acquired illegally by a criminal and transfers it to a third party. This can be done in person, via a courier, or above all electronically. In exchange for their services, money mules typically get a small cut of the money transferred.
“Apart from encountering fraudsters in person, on the street, people get recruited as money mules online through seemingly legitimate job offers. For instance, a recruiter may pose as a representative of an overseas company seeking ‘local representatives’ or ‘money transfer agents’ in order, say, to avoid excessive taxation. These ads usually have no set educational or experience requirements, and promise instant cash. They’re posted in online job forums, delivered as pop-ups, and sent via social media platforms (especially Facebook), email, and messaging apps,” V. Jerenkevič told us.
Most people don’t realize that such “jobs” (that usually aren’t even contractual) are considered to be a type of money laundering and therefore illegal. Or that they may be penalized as accomplices in the crime that generated the money they’re shuttling between their “boss” and third parties. After all, in most countries, people are held legally responsible for the funds coming in and out of their bank accounts, regardless of whether they know the origins of those funds.
Ideally, every individual should be aware that they are personally responsible for any transactions made through their bank account, as defined by law. Unfortunately, many people are unaware that such legal responsibility exists, and they mistakenly believe that giving their IBAN number to third parties is not dangerous or illegal. Citizens should be informed about this by their governments, banks, or other responsible institutions. It’s especially important to educate the public on how to recognize attempts to recruit them as money mules, what the consequences are, and how to avoid becoming involved. For example, such fraudulent offers often: do not include clearly defined job responsibilities; lack official contracts, etc.
Virtually anyone can be recruited as a money mule, regardless of age, level of education or any other demographic category. From retired people looking for an extra source of income to cover their growing medical bills to students in search of a side gig to get themselves through school – anyone can fall for the scam, as it seems to offer easy money. Even teenagers as young as 12 are being increasingly targeted.
When asked what should people keep in mind to minimize the risk of becoming victims, here’s what our colleague had to say:
“The main thing is to always be suspicious of any offer that entails letting people you don’t know use your bank account. You and you alone are responsible for it. In the eyes of the law, receiving, holding, or transferring money procured by criminal means makes you an accomplice. If you encounter such offers, don’t reply and don’t open any associated links online. Instead, report the incident to the police. All it takes is a momentary slip up and you might end up in a whole lot of trouble. The good news is, however, that if you stay mindful of the red flags, you should be perfectly safe”.