BioCatch Details Danger of Mule Accounts

BioCatch is once again calling attention to the issue of mule accounts. In the latest post on the company blog, the behavioral biometrics specialist explains that mule accounts are an essential component of the fraud supply chain because they give cybercriminals a place to send any money they acquire through illicit means.

According to BioCatch, there are two main types of mule accounts, the first of which is essentially a form of new account fraud. A cybercriminal will use falsified or stolen personal information to set up a new account, often taking advantage of favorable promotional campaigns in which banks seek to recruit large numbers of new users (one digital bank found that it received 900 fraudulent applications for every 100 legitimate ones). The fraudster will then let the account lie dormant for a period of time to evade detection, before eventually using it to launder stolen funds. 

The second type of mule account is an otherwise genuine account that belongs to another user. Fraudsters will use social engineering (common tactics include work-from-home or romance opportunities) to persuade the victim to allow the fraudster to transfer money into and out of their account. Romance scams can be particularly costly for the victims, and represent as much as 20 percent of all mule schemes.

BioCatch argues that behavioral biometrics offers a potential solution to both problems. Mule accounts usually display certain patterns, such as the number and speed of certain transactions, that can be identified with risk analytics software. Fraudsters, meanwhile, will often navigate account opening menus more quickly than regular users because they have been through the process so many times. They may also struggle when entering personal information because they have not memorized the data they are inputting. Behavioral biometrics can spot those patterns and step in to stop potentially fraudulent activity.

BioCatch has previously noted that social engineering attacks and the number of mule accounts have increased since the onset of COVID-19. Much of that can be attributed to the higher volume of online traffic during the pandemic.

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June 19, 2020 – by Eric Weiss