Money mules: Don’t allow crooks to abuse your kindness with these tricks

Consumers must be careful not to be a money mule this festive season.

Although it is a time to enjoy, spend quality time with family and shower others in kindness and generosity, the South African festive season is also unfortunately synonymous with fraud.

If history is anything to go by, many South Africans will fall victim to fraud during this time.

“Scammers and fraudsters are likely to intensify their activities during the holiday season. It is important to note that these fraudsters do not discriminate or have any regard for their victim’s age, race or profession,” Reana Steyn, Ombudsman for Banking Services (OBS), says.

She points out that these fraudsters do not act alone but are often part of well-run criminal syndicates and unfortunately, it is often the elderly who are most vulnerable and most likely to be left devastated by these fraudsters.

The financial losses they cause often evolve into a societal problem and their after-affects may result in irreparable financial and emotional damage to families, especially those from a less privileged background on the long term.

“Therefore, it is important that all South Africans watch out for these fraudsters, whose mission is to defraud anyone they come into contact with. Often, large sums of money – sometimes someone’s whole life savings – are wiped out in the process.” 

Steyn says most victims only report these crimes long after they were committed, meaning that the investigations are often delayed, giving these criminals the chance to escape.

“Consumers then ask the banks to refund the monies they paid over to fraudsters, but these requests cannot be met by the banks who acted on the client’s instructions.”

She points out that consumers are, unknowingly, the biggest enablers of these crimes as they act as money mules.

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What are Money Mules?

Money mules are regular consumers with a bank account who act on a request for help and allow someone else to transact through their accounts.

Not knowing that the party asking for help is a fraudster, consumers then receive the money which is then moved out of the account by way of withdrawal or transfer to a different account to ensure that the victims of the fraud do not recover it.

“The success of these scams depends largely on the ability of fraudsters to convince ordinary and in many instances, unsuspecting legitimate account holders, into helping a person in need. However, it is very important to note that bank account holders are responsible for what happens with their accounts.”

“An account holder who, knowingly or unknowingly, aids any fraudster, is considered an accomplice by the letter of the law. As a result, criminal charges, as serious as money laundering, may be brought against them,” warns Steyn.

She points out that her office was aware that ordinary South Africans are only trying to help, assisting friends and strangers by receiving monies into their accounts without knowing the legitimacy of their origins.

Steyn recommends that bank customers who find themselves in situations where they are asked to be money mules, contact their banks before transferring or withdrawing the funds or handing them over to someone else. Consumers should also do everything in their power to establish the legitimacy of the payments. Only if the payment is not disputed, should the funds be released.

Steyn says a bank customer lodged a complaint with the OBS that her bank had listed her at the Southern African Fraud Prevention Services (SAFPS) as a fraudster which prevented her from opening any other bank account.

She begged the bank to remove the listing on her name since she was never involved in any fraudulent activities but merely assisted her friend in receiving money through her account. When the OBS investigated, it was established that the funds were the proceeds of a crime being investigated by the Hawks.

It was also established that the so-called friend had subsequently been killed in a shoot-out with the Hawks and since the consumer admitted to allowing a third party to use her account, the OBS ruled that, as the account holder, she was liable for the transactions and that the SAFPS listing was justified. This is how quickly it happens.

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Consequences of being a money mule

Steyn warns that anyone found to be a money mule is opening themselves up to potential criminal liability, punishable by law, adding that claiming that you were not aware of the crime may not prove ignorance of the law and ignorance is not a valid defence in any way.

Additionally, acting as a money mule can damage your credit and financial standing, as happened to the consumer who complained to the Ombudsman.

Other common scams

 Fraudsters are still using the most common, but tried and tested, scams, such as internet banking fraud (phishing), vishing scams, deposit scams, change of banking details scams (email interception scams) and ATM card swapping daily, commonly defrauding thousands of consumers.

“As the Ombudsman has done in the past, we urge consumers to ensure that they educate themselves about the threats and modus operandi that fraudsters use in order to protect themselves and their money,” says Steyn.

Apart from the ATM scams, the OBS noted that all of these other scams are highly sophisticated and are among the most lucrative of all financial crimes. It is therefore safe to assume that these scams will continue in the future unless fraudsters are stopped in their tracks.

One way to stop them is to protect yourself and not be a money mule:

• Never allow someone else to use your account for any transactions, even if you know the person and do not fall for a sad story designed to play on your feelings.
• If you have any doubts about the origin of the money, or if a transaction appears unusual, report it to your bank and verify the details.

Also protect yourself against vishing:

• Never share personal and confidential information such as your card number, PIN, password or OTP, with strangers over the phone, even if your Caller ID gives the name of a bank or some other company or organisation. Do not believe it when the person says they are calling from your bank, because your bank will not ask for that.
• If you lose cell phone connectivity for some time for no apparent reason, receive an SMS for a Sim swap or a number port you did not request, contact your bank’s fraud department and then your network service provider immediately.

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Protect yourself against phishing fraud:

• Do not click on links or icons in unsolicited emails.
• Check that you are on the authentic website before entering any personal information.
• If you think your device may have been compromised, contact your bank immediately and request that your account be blocked.
• Avoid public Wi-Fi connections and internet cafes for your online banking and buying online.

Protect yourself against ATM Fraud:

• Never ask or accept help from a random stranger at the ATM and be wary of strangers asking you for help or distracting you.
• If your card is retained, phone your bank’s toll-free stop card line immediately and stop your card. Do not allow bystanders to call the toll-free stop card line on your behalf as they could be tricking you into thinking your card has been stopped.