Word of Advice

10 September 2007

Don’t be a money mule

Is it time to quit your day job? Certainly seems that way if, like many of us, you’ve received an email offering you an amazing job offer – to become a ‘Financial Agent’ (or something similar) for an international company, earning big bucks for little work.

There’s no investment needed and the scheme sounds quite simple: you receive payments on behalf of a company and transfer money to them using your own bank account, keeping a commission on each transaction you send.

The company is based overseas and it needs an agent to receive payments in this country. All you have to do is transfer the money to the company account overseas, less your commission. But, as you’ve probably guessed by now, this is a scam. And it could also land you in hot water.

Money laundering

This scam is usually a front for money laundering. Money laundering is when somebody tries to ‘launder’ money they’ve earned from unlawful activities to make it look like it came from a legal source. They do this by putting the money through a series of bank accounts to hide its original (and illegal) source. This money might come from organised crime or from the proceeds of other scams like internet banking scams.

If you accept the offer you may be breaking the law and become what is known as a ‘money mule’ – an unwitting participant in an illegal money laundering scheme.

Hooking you in

The approach from the scammers can come in a number of ways. It could be by an offer like the one described above which sounds like a work from home scheme, or by an email similar to the advance fee fraud (Nigerian) scams, or in any other way which means you have to hand over bank account details.

If you accept the invitation the scammers will get you in a variety of ways. You may even find that in the beginning the scammer keeps their word and lets you keep a small percentage of the total transferred. But then the scammer will ask you why you haven’t transferred some money which you didn’t receive. The scammer will then pressure you to make up for the ‘missing payment’ out of your own pocket.

Another common twist is that if you agree to take part, the scammer can then use your account details to clean out your savings from your account.

Even if that doesn’t happen, if you agree to transfer money in this way you are more than likely being used to cover someone else’s unlawful tracks. If the authorities follow the money trail from a crime that the person scamming you was involved in, it could lead straight to your bank account.

What to look out for:

• you get an offer (by email, letter or fax) that involves you sending and receiving money
• there’s a promise of employment just by using your bank account, usually with job titles like ‘Transfer Agent’ or ‘Account Manager’
• you’re asked what your bank account details are so money can be sent to your account
• you’re told that they need someone in your country so they can conduct their business.

How to protect yourself:

• use your common sense – never send money, give your credit card details or bank details to anyone you do not know and trust
• be very wary of schemes and products that guarantee massive incomes or winnings
• don’t open suspicious or spam emails – delete them straight away
• remember, there are no get-rich-quick schemes, just scammers looking to make money illegally.

The most important thing to remember is that if an offer sounds too good to be true, then it probably is.

The Ministry of Consumer Affairs runs a website to keep people updated with information on various scams.