TymeBank warns customers against becoming unwitting ‘money mules’

TymeBank has issued a warning to its customers to caution them against letting strangers use their bank accounts – even if they are promised payment in return for the favour.

The bank also issued a warning to the public in general after it noticed an increase in so-called mule accounts.

A mule account is one that is opened for the sole purpose of transferring money from one account to another, usually as part of a process to launder profits from criminal activity.

“There’s a risk that you may be helping criminals to commit crimes and hide the money they have obtained illegally,” says George Wandsella, TymeBank’s head of enterprise risk and fraud.

He says this is something that “could see you being arrested for being a money mule and can also damage your credit and financial standing”.

Criminals will sometimes ask people to open banks accounts for them and pay them. In other cases, bank accounts are opened using somebody’s personal information without their knowledge. Fraudsters then use the account to perform illicit transfers of funds to other accounts.

The individual opening the account is referred to as a “money mule”, and people can unwittingly be considered a money mule if their account is used for these transactions.

Context

Wandsella says the increase in fraudulent accounts and transfers needs to be seen in the context of the recently published annual crime statistics which indicated that banking on digital platforms now exceeds all other transaction channels in SA.

“The rise in online transactions has been accompanied by a noticeable increase in mule account schemes in SA in the last few years, with criminals taking advantage of people’s vulnerability with the promise of easy money.”

He adds that targets are often approached online, or via social media platforms, with young people often lured into these schemes.

“TymeBank has robust security systems in place and besides protecting customer accounts, our technology also helps us monitor suspicious activity, but criminals are always looking for ways to hide their ill-gotten gains.”

TymeBank says it is determined to prevent the opening of mule accounts and adamant about closing accounts that are shown to be used for suspicious transactions, adding that there is probably a “very small percentage” of mule accounts among its customer base.

Increasing trend

“We are seeing an increasing trend in this area globally, as well as in the domestic banking industry, as referenced in the Sabric [South African Banking Risk Information Centre] crime statistics. The rapid growth in digital adoption and social media is a key contributor to this trend,” says Wandsella.

“We find that consumers are not aware of the implications of being a money mule.

“If you’re found guilty of being a money mule you can damage your credit and financial standing and you could also end up in prison for money laundering.”

TymeBank warns people to look out for the methods typically used by criminals:

• The fraudster asks the unsuspecting account holder to transfer money on their behalf into a third-party account in exchange for a fee, and with the third-party account often at the same bank, the transaction can be processed in real time;
• Someone approaches you and asks you to open a bank account online and then allow the other person to use it, often offering an explanation as to why they are unable to open their own bank account that might sound innocent; and
• Criminals also use lost or stolen identity documents to open mule accounts.

“Customers also need to play their part by following some simple rules,” says Wandsella.

“Besides helping to fight the worldwide problem of money-laundering, it may also keep you out of jail.”

He says no one should never share their financial details or give access to their bank account to anyone they don’t know and trust.

“Don’t trust emails, texts or similar communication from someone that promises you money in exchange for doing very little.

“Be careful of offers promising a way to make money fast and easily,” says Wandsella.

“If this happens, don’t accept the offer, and report it to the police.”

People should report a lost or stolen identity document or identity card to the South African Fraud Prevention Services (Safps) to prevent fraudsters opening a bank account or credit facilities with your details.

“Forewarned is forearmed. Stay informed about the latest banking fraud and scams,” says Wandsella.