Financial institutions continue to prioritize investment in digital banking to grow revenue and acquire new customers. The coronavirus pandemic accelerated that transformation, specifically around digital account opening. With access to physical branches restricted, d
An Environment Ripe for Fraud
So, why are money mules becoming a modern-day gold rush for cybercriminals? First, the economic climate brought on by the COVID-19 pandemic has enticed cybercriminals to step up their game. Global economic relief programs, such as unemployment benefits and government stimulus checks, were ripe for fraud because of open-door policies designed to distribute money fast to businesses and consumers. In the United States alone, it is estimated that more than $36 billion in improper payments were made to scammers. In the UK, up to £3.5 billion of unemployment payments were the result of fraud or error.
Second, technology has made it easier than ever for criminals to open new accounts using digital banking channels and bypass traditional KYC barriers. While mule recruitment is still popular and fraud-as-a-service business models provide the opportunity to “rent” mule accounts, it has become easier for cybercriminals to control their own mule networks by simply opening an account in someone else’s name and withdrawing the stolen funds.
Last, the lack of clear ownership and resources dedicated to continuous detection and monitoring for mule accounts has given cybercriminals the edge. Most financial institutions are not in the business of proactively identifying mule accounts unless it is painfully obvious. Mule detection is instead a reactive practice that moves up the priority list only when law enforcement or a regulatory agency becomes involved. Combined with a lack of industry standards or best practices, and suddenly an ideal environment is born for mule accounts to flourish.