Money muling: What it is and how to protect yourself

Across the world, scams are becoming increasingly advanced and harder to spot. In 2022, 239,000 scams were reported in Australia, with victims amassing financial losses of $568.6 million. The volume of scams and associated losses is predicted to rise even further.

A particularly concerning syndicate of modern financial scams is known as money muling. This article explains what a money mule is, how to spot one, and what to do if you believe you’ve been used as one.

What is a money mule?

The term money muling is a mechanism to clear elicit funds and move proceeds of crime into the hands of criminals. A money mule acts as a middle-person that funnels money received through organised crime into another bank account.  Accounts can be domestic or offshore bank accounts, and the funds can be obtained through various forms of illegal activity.

The purpose of the money mule is to ‘launder’ or ‘clean’ money that has been obtained through crime. Generally the mule will receive money into their own account or an account they’ve set up, and transfer it on to another third party.

How do criminals recruit money mules?

Criminals need money mules to pass on illegally-obtained funds through a third party. They recruit individuals as mules in a few different ways. Some examples are:

Money making scams

Mules can be recruited via the premise of a job or an earning opportunity, where their only task is to make financial transfers. The mule receives funds into their account and transfers it on as instructed, while retaining a commission for themselves.

Romance scams

Mules can be recruited through bogus online relationships that escalate quickly. Perpetrators shower victims with love and affection, before asking for help transferring money. In some romance scams, the victim is scammed out of their own money. When money muling is involved, the victim isn’t paying their own money, but making the transfer on behalf of the perpetrator because they believe the relationship to be genuine.

Sextortion scams

The AFP has seen a concerning rise in sextortion cases that involve money muling. Victims are coerced into sending explicit sexual images of themselves to criminals. These criminals then threaten to share the images publicly if the victim does not comply with their demands. These demands can then position the victim as the money mule, who is asked to make a transfer on the criminal’s behalf.

Phishing and hacking scams

Individuals’ bank accounts can be used for money muling without the account owner even knowing. Criminals may hack into bank accounts and use it to make the transfers themselves.

Know if you’re being used as a money mule

There are some important warning signs to know if you’re being used as money mule, here are the key signs to watch out for.

• If you are offered a job or an earning opportunity that sounds too good to be true, it probably is. Being offered a commission to make transfers either locally or overseas might sound like an easy way to make some extra money, but by doing so you are participating in criminal activity. The scammer may fabricate elaborate lies to convince you that the transfer is legitimate, but it isn’t worth the risk.
• If you or someone you know has commenced an online relationship that has escalated very quickly, they may be a victim of a money mule scam. Warning signs that someone you know could be involved in a romance scam include sudden financial stress or unusual behaviour.
• If someone has asked you for personal information, they may be trying to commit identity fraud to access your accounts for muling. Be vigilant with how you share your information.
• If a vulnerable person notifies you of unusual behaviour or transactions on their online accounts.
• Any requests to receive and/or transfer money from someone you don’t know, or under unusual circumstances.

Acting as a money mule is a criminal offence

Some money mules are unaware that they are participating in organised crime. Others are unaware of their involvement in illegal activity, while some are willing participants in the transaction without being completely aware of its criminal implications.

Participating in money muling is a criminal offence, and mules can face criminal charges. Don’t be tempted into money muling, even if you are offered a significant financial reward. In addition to participating in criminal activity, you risk violating the terms of your bank or financial institution and could lose access to your accounts.

If you think you’ve been approached to participate in money muling, or you’ve already engaged with a criminal, contact your bank or financial institution immediately. Scams can also be reported to www.scamwatch.gov.au.

Help prevent everyday Australians from becoming money mules, Find out more about protecting yourself.

Things to remember

• Bendigo Bank will never call you to ask you to move your money
• Bendigo Bank will never request personal information such as a pin or password or ask you to login to online services from an email or SMS text message.
• Never provide your 6-digit e-banking security code to anyone over the phone or online.
• Bendigo Bank will never ask you to click on a link in an SMS text message to login to e-banking or request remote access to your PC or device.

For the latest scam alerts and information to keep yourself and your family safe online, visit our scam alerts page.