Hunting money mules with a 360-degree view of identities

Learn how money mules operate and why forward-thinking organisations leverage digital, physical, email and behavioural intelligence to help prevent money mules from aiding fraud.
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Money mules play a dangerous role in fraud schemes

Money mules are a key enabler of digital banking fraud which impacts consumers and organisations across the globe.

A money mule is a bank account, or the holder of the account, necessary for receiving fraudulent funds so these can be transferred and cashed out.

Mules are also often used for the purposes of laundering money through the financial system. In this instance, their aim is to help obscure the trail of ill-gotten gains and make it more challenging to trace the ultimate recipients. Money can be moved rapidly through large networks of seemingly unconnected mule accounts held at multiple financial institutions, making it harder to track.
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Hunting money mules with a 360-degree view of identities report

Types of money mules can be categorised based on their knowledge and intentions and require appropriate mitigation strategies:

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Purposely Opened Mules

Accounts set up specifically for mule activity by the fraudsters themselves or by complicit individuals. They knowingly participate in receiving and transferring funds on behalf of criminals and are typically motivated by financial gain.
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Recruited Mules

Legitimate accounts whose owners knowingly begin to engage in mule activity. They may have been lured into the scheme under false pretences or intimidation or may be convinced that their involvement is legitimate. They may be motivated by promises of easy money or by the belief that they are assisting in a legal financial transaction.
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Unwitting Mules

Genuine accounts whose owners have been unwittingly scammed into conducting mule activity. They are completely unaware that they are involved in criminal activities. They are not motivated by criminal intentions; instead, they may believe they are helping a friend or a legitimate business.

The movement of fraudulent funds through a mule network

The graphic illustrates an example of movement of funds through a mule network. Prior to receiving fraudulent funds, mule account holders make small arbitrary credits and debits to establish a payment history.

In this context, the £10,000 payment from a fraud victim looks atypical and can be used as a reliable fraud indicator.

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The gold standard for money mule detection: A 360-degree view of identities

Differentiating between legitimate and suspicious activities from a vast number of daily interactions and transactions can be complex. While it’s easier to spot patterns within an organisation’s own customer interactions, difficulty arises when tracking patterns that involve external entities, especially when funds transfer outside the bank’s direct oversight.

The foundation for effectively identifying and interrupting more mule accounts rests on the ability to understand the parties involved more holistically, from digital and physical identities and associated attributes, events and behaviours, to the parties’ accounts, interactions and transactions.

Forward-thinking organisations should adopt the following 3 steps to develop a 360-degree view of a consumer's identity:

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1. Link insights across multiple dimensions

Multi-dimensionality is an important differentiator for effective fraud prevention strategies. A more effective approach should look beyond financial transactions and use broader data to intercept mule accounts more efficiently and help prevent the flow of fraudulent funds.

Multiple solutions can execute in tandem, consolidating insights across physical, digital and email dimensions for a robust perspective that helps support the race toward identifying and preventing money mule activity.

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2. Leverage global, cross-industry intelligence

LexisNexis® Digital Identity Network® crowdsources insights across thousands of businesses globally, building one of the largest unique repositories of digital identity intelligence that grows more powerful with each transaction.

LexisNexis® Digital Identity Network® helps shed light on mule operations spanning multiple institutions and allows organisations to make highly-informed risk assessments, not just on transactions, but on the behaviours of the entities making transactions and on hidden associations between the devices and phone numbers they use.

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3. Identify suspicious patterns with a machine learning model

Continuous pattern analysis, rule modelling and optimisation through a machine learning mule model connects insights from an incredibly diverse network of intelligence to help predict the likelihood that an account is being used for mule activity, helping ensure organisations can make the most of the data-driven solutions at their disposal.

The professional services team at LexisNexis® Risk Solutions can develop, train and test the machine learning mule model and can work with customers to identify and mitigate the unique fraud threats they may be facing – even if this requires thinking from a fraudster’s point of view to make their criminal activities as hard to operate as possible.

Detect more mules and drive results that can take your fraud prevention to new heights

Forward-thinking organisations across the globe are making strides in detecting more mule accounts and protecting consumers with LexisNexis® Risk Solutions.
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Notable improvements in mule detection

A leading bank achieved 100% increase in mule detection rates over just one month, compared to previous mule detection strategies.
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Improved customer experience

Customers can benefit from a smoother experience by reducing unnecessary friction associated to the ability to distinguish between trusted accounts and mule activity.
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Streamlined operational efficiency

Flagging just four cases per day and reducing the need for manual reviews, a top financial organisation achieved an uplift of 300% in mule detection, compared to the previous approach.
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Significant incremental annual fraud value captured

By adapting their fraud prevention approach, organisations are improving their ability to identify and stop the flow of fraudulent funds through mule accounts.

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