urge in ‘Money Mule’ Bank Accounts Detected in India: Latest Report

urge in ‘Money Mule’ Bank Accounts Detected in India: Latest Report

According to a survey released on Wednesday, banks in India must strengthen their fraud defenses as the number of mule accounts is on the rise, and third-party account takeover fraud, which accounts for 55% of all frauds in the nation, poses a greater threat than social engineering scams. People who have been tricked by scammers into using their bank accounts to launder illicit or stolen funds are the owners of mule accounts. Because of their involvement, the “money mule” is the subject of investigations when similar events are recorded. A global pioneer in digital fraud detection, BioCatch, released research titled “2024 Digital Banking Fraud Trends in India,” which states that each device implicated in mule activity in India logged into an average of 35 accounts.

Fraudsters most often use foreign IP addresses to access Indian mule accounts. The results indicated that although 86% of the initial session of recorded mule account activity originated from within India, within a month that percentage dropped to just 20%, and 16% of those sessions made use of a virtual private network (VPN). Customers of BioCatch observed more mule activity in Bhubaneswar than in any other place in the nation (14% of the total). According to the research, Mumbai accounted for 2.2%, Bengaluru for 1.8%, Cuttack for 1.6%, Lucknow and Navi Mumbai for 3.4% of the documented mule activity, and two West Bengal cities, Bhagabatipur and Gobindapur, for 1.7% and 2.6%, respectively.

Nine out of ten mule accounts were unreported at one partner bank in the nation, according to BioCatch. According to Tom Peacock, director of global fraud intelligence at BioCatch, “the prevalence of mule accounts potentially represents the most under-the-radar trend in the entire fraud space.” The results follow the Reserve Bank of India’s (RBI) suggestion that financial institutions in that nation stop using text-based, one-time passcodes for secure authentication.

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According to counter-fraud specialist Charanjeet S. Bhatia, “the existing OTP-based authentication doesn’t protect customers against new-age frauds, including customer-initiated fraudulent transactions.” In response to the RBI’s advice, Charanjeet S. Bhatia stated, “Banks can do a lot more than what they are currently doing to protect customers with the right technology and implementations.”