Surprisingly, the prime targets of online fraud are Millennials, with both older and younger generations more wary of transactions. It is not all that surprising. “Gen Z” tops out at about 25 years-old. They test out to be a bit more conservative in their outlook and spending habits. They have not only fully embraced the internet but have a high degree of sophistication. “Gen X” and Boomers are later adopters and while segments of both generations are computer savvy, they clearly are not as shrewd overall, as Millennials.
Millennials have the disposable income, busy work-life schedules and the familiarity with online transactions that can often force them to border on the “cavalier.” Cyber-criminals know this.
Acceleration of Cyber-Crimes
During the lockdown, according to cyber-fraud writer and expert April Berthene (February 24, 2021) there was a proliferation of cyber-crime. One of the more insidious scams is a new scheme called “Muling.” Said April Berthene:
“Mule fraud scheme —in which criminals fool everyday consumers into helping them steal goods—increased during the pandemic, as more consumers looked for work at home.” Her source for this information was a web prevention service.
Since the beginning of the lockdown this form of fraud has caught about five to eight victims a day. That doesn’t sound like much of a big deal, except when we realize each mule fraud can rob retailers of up to $15,000 or more of merchandise.
The Scheme
It is important for us to define the mule fraud scheme. The Federal Bureau of Investigation defines the money mule scheme in this way:
“A money mule is someone who transfers or moves illegally acquired money on behalf of someone else. Criminals recruit money mules to help launder proceeds derived from online scams and frauds or crimes like human trafficking and drug trafficking. Money mules add layers of distance between crime victims and criminals, which makes it harder for law enforcement to accurately trace money trails.”
The “mule,” the unsuspecting victim “move(s) funds in various ways, including through bank accounts, cashier’s checks, virtual currency, prepaid debit cards, or money service businesses.” – Mule fraud scheme.
During the pandemic, tens of millions of Americans were encouraged, or were asked to work from home. This added another layer of relaxation.
Firms identifying themselves as legitimate “logistics providers” offered an almost ridiculously easy way for people to make money. They posted the jobs on social media and presented themselves through rather sophisticated websites. Often cyber criminals co-opted the legitimate websites.
The so-called logistics firms promise naïve applicants ridiculously exorbitant salaries including a good salary, a fee for every package shipped and a bonus of some kind. When the applicant agreed to an interview, the fraudsters essentially have them.
After the “interview,” the applicant is asked to provide a photo ID, fill out a “contract,” and watch a training video. The credit card the fraudsters used had been previously stolen and purchased on the “dark web.” They purchased high ticket items using the stolen credit card numbers and then had the goods shipped to the dupe.
It all seemed legitimate enough to the retailers: a valid credit card, an address and obviously, a name. Here is where the mule represented an important missing piece. The mule received the goods, took photos of them, repackaged them and pre-printed a shipping label. The goods were frequently shipped to countries such as Malaysia or within the United States.
Obviously, the person whose credit card number was stolen received huge invoices and after fighting the charges, there were bank charge-backs. The retailers got screwed to the tune of millions of dollars and of course, the mules don’t get paid.
Think It Through?
Fraud works in an atmosphere where there is no oversite. The unsuspecting mules never thought through one aspect of this fraud, including why anyone would pay them to do this sort of work. They saw the opportunity to make a good monthly salary, bonuses, and shipping award for each package. It was almost like watching a cheesy, made for television movie where “beautiful people” work at jobs, get paid exorbitant amounts of money for “doing something,” and party.
Except. Except they never got paid, enabled a fraudster to steal hundreds of thousands in merchandise, and were complicit in committing a crime.
This type of unethical behavior has not radically changed over the past century. The mechanism may be different, but the result is the same: gangsters use greed and ignorance to entice others to do their handiwork for them.
There was no due-diligence on the part of everyone duped in the fraud, most surprisingly financial institutions who clearly saw patterns and did nothing about it. In some cases, many packages were shipped to the same “mule.” We would think that the bank would have begun to suspect a problem. Was their greed so great they did not recognize unethical behavior for what it was? That could be the biggest surprise of all.
