There is not a single day that passes whereby a person does not get a call from the CBI, ED or the Customs. It is a well-known fact that these calls are fake and if one continues with it, there is a big scam waiting to take place.
To top all of this are the mule accounts, which have become another security nightmare for the agencies who are tasked with tackling cybercrime. Recently officials of the Cyber Crime Coordination Centre (14C), which falls under the Ministry of Home Affairs, informed the Prime Minister’s Office (PMO) about the shortcomings in the banking system, which has led to a steep rise in mule accounts.
A fraudster contacts a potential victim using an email, chat room or social media. They then persuade the potential victim to rent out their bank accounts or cards or receive unknown funds in their bank accounts in exchange for a reward. If the victim agrees to do so then the seamster conducts unauthorised transactions using the said account. This account is known as a mule account.
Shortcomings in the banking sector
During the briefing at the PMO, officials said that there were shortcomings in the banking system which were leading to the rise in the number of mule accounts. It was highlighted that the scammers were creating KYC documents of another person through cheques, ATMs and also digitally.
Data shows that the 14C detected 40,000 mule bank accounts in the beaches of SBI alone. Further 10,000 were found in the Punjab National Bank, 7,000 in Canara Bank, 6,000 in Kotak Mahindra and 5,000 in the Airtel Payment Bank.
The PMO was told that the loopholes had been identified. Further they sought an investigation into the role of bank managers, officials in the opening of mule accounts.
The Reserve Bank of India and the Finance Ministry will now take the necessary measures, while involving the banks. The banks would be told to fix the system and ensure that such mule accounts do not thrive any further.
Alarming rise
A report called ‘2024 Digital Banking Fraud Trends in India’ by BioCatch, a leader in digital fraud detection said that the most concerning aspect is that many such mule accounts go unreported.
Recently in a written reply to the Lok Sabha, the Minister of State for Finance, Pankaj Chaudhary said that as much as Rs 177 crore was lost on account of credit, debit card and internet banking frauds in the fiscal 2023-2024. This has been a rising trend in the last few years.
It is a problem of alarming proportions a cyber security official told Organiser. We have found that in many cases, some of the banking staff have been complicit, which has led to so many mule accounts being created. It is part of the larger cyber security problem and if not nipped now, it could become a bigger menace, the official also said.
During the meeting at the PMO, the officials were told about the steps taken by an inter-ministerial panel to address the issue. Further the state police were instructed to take proactive steps to address the problem.
Meanwhile the Home Ministry has issued an alert against such illegal payment gateways which have been created by transnational gangs of cybercriminals using mule bank accounts.
Such accounts are also being used for money laundering, officials said. During raids that were conducted in Gujarat and Andhra Pradesh recently, it was found that illegal digital payment gateways had been set up using mule accounts in a bid to launder the proceeds of different crimes.
“Some of the payment gateways identified during the operation are PeacePay, RTX Pay, PoccoPay, RPPay etc. These gateways are learnt to be providing money laundering as a service and are operated by foreign nationals,” a statement by the government read.
The issue will be discussed further at the All India Conference of the Director Generals/Inspector Generals of all Police in Bhubaneswar. The conference is being held from November 28-30 and will be attended by Prime Minister Narendra Modi. Home Minister Amit Shah and National Security Advisor Ajit Doval too would be present at the conference. During the meet, several issues such as internal security and counterterrorism will be discussed. However top on the agenda would be enhancing technology in policing in the wake of cyber crimes rising.
Some tips on protecting yourself and your account
Do not share bank account details, internet banking username or password, ATM card or a PIN number with any third party. Be cautious if your are solicited to use an unconventional payment method.
One should not accept any lucrative job offers or rewards on purported investments schemes which are too good to be true. Further investments that assure of a zero risk is best avoided. There are many cases in which a victim is forced to make quick decisions. One should take a pause and analyse whatever offer has been made. More importantly if a person has fallen trap to such a fraud, it needs to be reported immediately.
