Scambusters: ANZ bank expert explains money mules

Banks are cracking down on ‘mule’ accounts and beginning work on a system to match account names and numbers in a bid to stop cyber criminals. Some money mules are victims themselves, while others are guilty of defrauding people of millions of dollars. What is a money mule, and how are ordinary Kiwis being tricked into aiding the illegal transfer of funds for international scams?

A money mule is someone who is involved in transferring money between bank accounts for someone else, money that is typically illegal and part of criminal activity.

In some cases, the mules are willing participants.

A 60-year-old Auckland man was arrested last year for being a money mule and allegedly stealing just under $2 million from two victims.

Police alleged the man was directly involved in two examples of the scam, where one victim lost $950,000 and another lost nearly $1m.

In other scenarios, money mules might be innocent victims.

ANZ customer protection manager Craig Bruce said in many cases, people had been tricked into aiding the illegal transfer of funds.

“It’s a way of getting money through the banking system in a way that’s harder for us to identify.

“As we’ve seen the level of scams increase ... mules have become more dominant as well.”

ANZ customer protection manager Craig Bruce. Photo / Dean Purcell

Scammers often attract victims into becoming money mules by offering an easy way to make quick money.

Sometimes the scam is masked as a legitimate job advertisement, such as an “account manager”, Bruce said.

“So they [the victim] have applied for a job, they’re asked to open an account so that they can get paid commission, and they’ll see this money come through.

“They’re told to hold on to some of that money and then they’ll pass the rest of the money out.”

Bruce said he was starting to see an increase in the number of younger people being targeted by criminals recruiting money mules.

“I think that [job scam] particularly targets the younger population, who perhaps don’t know as much about the banking system, are more likely to believe the story or are just a bit more trusting.

“Social media tends to be the starting point for a lot of the scam activity that we see.”

In other cases, people are offered money to sell their bank account to someone.

But alongside the bank account is all of the victim’s personal information attached to it, which is very valuable for a scammer trying to pose as someone legit.

In a romance scam, unwitting mules may have an online “partner” who tells them they’re going to transfer some money to them.

They might then ask the victim to send that money to another account, usually controlled by the fraudster.

“The scammers will probably pick and choose different ways to get to you depending on your age group.”

What makes mule scams different?

Money mules are particularly hard to pick up on because most of the transactions through the bank account are often legitimate, Bruce said.

The money from the scams almost always ends up going out internationally.

“It could go through two or three or four different steps before it reaches the ultimate destination.”

What that money gets spent on overseas is another mystery.

“A fair amount of it will go out as cryptocurrency, some are simply international monetary transfers.

“Once it’s there, depending on how soon we know about it, we can follow it up and try and get it back.

“But the reality is once it’s left the country, it’s very hard to do, we have no rights as such legally - we can only ask the bank to return the money.”

The Herald recently revealed an accused “money mule” already under investigation for stealing $1m from an Auckland businessman was allegedly able to fleece another nine victims of nearly $800,000 before his accounts were frozen and he was arrested a year later for money laundering.

It’s alleged the man used “mule” accounts at three separate banks - Westpac, BNZ and ASB - to help overseas scammers steal the money between November 2022 and September 2023 before police raided his property last month.

Banking Ombudsman Nicola Sladden said stopping money mule activity was essential to preventing losses to scam victims, and she supported “urgent action” to tackle this issue.

“We expect banks to be vigilant and take proactive steps to identify and prevent money mule activity. This includes using technology, intelligence and lawful data sharing.”

What are banks doing to detect scams?

New Zealand Banking Association [NZBA] has been part of a proposal to establish a national anti-scam centre.

“Banks were already sharing some information on money mules, but the new phase of work will increase the speed and amount of information being shared,” said NZBA chief executive Roger Beaumont.

ANZ has a team of six fraud analysts tasked with updating fraud detection algorithms.

Craig Bruce says: “We have a fraud monitoring system and currently a team of more than 100 detection analysts and fraud investigators in place to attempt to identify suspicious activity on customer accounts and help try to protect customers from scams.

“We stop many regularly.”

More than 300 malicious/fake ANZ websites have been shut down in the past 12 months as well as over 5000 numbers used in cold-call scams.

Suspicious or larger payments now trigger a two-factor authentication code which is sent to the customer via text message to confirm they want to action the payment.

“This has helped protect our customers from around $6m of fraud and scams in the past 12 months.”

In July, ANZ launched a new tool called ANZ Fraud Check which alerts customers via text message to any card transactions identified as unusual.

More than 360,000 messages have been so far sent out and 75 per cent of customers who get a notification respond.

How to get help

Internal Affairs anti-spam and scam awareness: Forward text scams for free to 7726

Cert NZ: Individuals, small businesses can report a cyber attack, get advice: www.cert.govt.nz

Financial Markets Authority: https://www.fma.govt.nz/scams/

Privacy Commissioner: Complaints about privacy breaches. 0800 803 909 or privacy.org.nz/your-rights/making-a-complaint/

ID fraud: Internal Affairs advice: dia.govt.nz/Identity - Are-you-a-victim-of-identity-theft

IDCare: Assistance freezing your credit record, regaining control of your online identity after an ID theft: idcare.org

Netsafe: Report online bullying, hate speech, dangerous content: netsafe.org.nz

NZ Police: Report cybercrime online scams, online child safety issues: police.govt.nz/advice-services/cybercrime-and-internet

If you believe you are or have been the victim of fraud, contact police at 105.police.govt.nz, or call police on 105.

Scambusters is an independent editorial series brought to you with the support of the Banking Association.