Students face fraud through money mule and rental scams

All consumers, particularly students, are urged to be vigilant to the risks of being recruited as a money mule, writes John Hearne

Fraudsmart members identified over 2,600 money mule accounts in the first half of this year. An average of €10,000 was moved through these accounts.

New figures from Fraudsmart, the banking industry’s fraud awareness initiative, show that almost €17.5m was illegally transferred through money mule accounts in the first half of this year. That’s a rise of almost 50% on figures from the same period in 2022.

So what’s a money mule? This is simply someone who receives criminal money into their bank account and transfers it into another account, often in return for money or an expensive gift. Fraudsmart members identified over 2,600 money mule accounts in the first half of this year. An average of €10,000 was moved through these accounts—more than double the average observed in the first half of 2022.

The majority of money mule bank accounts continue to belong to those aged between 18 and 24 years of age, with some as young as 15. Fraudsmart is warning all consumers, particularly students, to be vigilant to the risks and consequences of being recruited as a money mule.

Niamh Davenport is Head of Financial Crime at the Banking and Payments Federation. 

Niamh Davenport: "The money being laundered is often used by criminals to facilitate other serious crimes such as terrorism, drug-trafficking and people smuggling."

She believes that the spike in mule activity may reflect increased levels of activity in text message scams and investment fraud observed by Fraudsmart in recent months, as criminals seek ways to launder their profits.

“Criminals frequently target young adults, usually recruiting them through social media ads and messages, but they are also known to approach young people in person; outside schools, colleges, or sports clubs. 

The money transferred by money mules are proceeds of crime, often stolen from innocent victims of text message scams and other types of fraud that our own friends and family can fall victim to. 

"Not only that, but the money being laundered is often used by criminals to facilitate other serious crimes such as terrorism, drug-trafficking and people smuggling. This is why the consequences faced for money muling are so serious and can result in a criminal record.”

Colette Murphy is USI Vice President for Welfare. She points out that college generates increased financial pressure on students and their families. The temptation to earn “quick and easy” money can often be very hard to resist.

“But we want to make sure students are aware of the risks of being coerced, conned, or tempted into working with fraudsters through social media posts or seemingly legitimate job adverts. Getting caught up in money muling can have a long-term impact on your future. It could affect your ability to get loans or to travel to many places, including to Australia or on a J1. 

"We know college can be a very expensive time and we urge any student worried about college expenses, or any other aspects of college life, to talk to their Students’ Union who will be able to advise them on the supports available.“

Accommodation scams

Meanwhile, rental scams continue to be a problem, both for students and everyone else dependent on a woefully inadequate rental sector. Earlier this year, An Garda Síochána highlighted one case where an Irish student lost €7,400 in a scam where a property advertised in the Netherlands was never actually available for rent. 

They say that there was a 38% spike in rental accommodation fraud between 2021 and 2022 and that €2 million has been stolen in accommodation and rental scams in the last five years.

Threshold provides independent advice and advocacy to people experiencing housing problems. They point out that finding rented accommodation can be challenging at the best of times. In the current market, it’s very difficult to find a safe, secure and affordable home, and all too easy to fall victim to a rental scam.

Never hand over a deposit for a property without first physically viewing the property and ensuring you’re happy with both it and the rental terms and conditions. Always exercise caution. Don’t rush into a decision, particularly if you have doubts.

Rental scams occur throughout the year and fall into three broad categories.

• In the first version, the scammer claims to be out of the country and so can’t show you the property. This doesn’t however stop them from seeking a deposit to secure the place.
• In the second form of the scam, the scammer is living at the property, shows a number of people around, collects deposits from all of them then disappears with the money.
• In the third variant, the transaction appears normal until the renter finds that the keys don’t work and the landlord has disappeared.

In order to avoid getting taken in by any of these scams, make sure to inspect the property in person. Take a picture of the landlord’s or letting agent’s photo identification before making any payments. Don’t trust online photos or virtual tours.

Make sure to use secure payment platforms or methods that offer you protection. Avoid making cash payments or transferring money directly to someone without verifying their identity. If the landlord or agent wants you to use a wire transfer or a cryptocurrency transaction, it is quite likely you’re dealing with a scammer. Bank transfers are the preferred method to pay your deposit and rent.

Request a written contract—also known as a licence or tenancy agreement—that clearly explains the terms and conditions of the rental agreement, including rent amount, deposit and any additional fees.

If something seems too good to be true, trust your instincts and investigate further before making any payment. Scammers will often try to rush you into making decisions fast, and in a desperately tight market, you can be sorely tempted to do things their way. Don’t do it. Take your time and do your research.

Be careful about sharing personal information on public platforms, especially social media, where scammers often try to find potential victims. Don’t ignore red flags, like exceptionally low rent, a landlord living abroad, foreign bank account details or inconsistent information.

If you do fall victim to a rental scam, don’t keep it to yourself. If you report it, you could end up stopping a scammer altogether, and helping to prevent other people from becoming victims.

If you come across a suspicious ad, call Threshold. They’ll help you figure out if it’s legitimate or not. And if you think you have been a victim of such a fraud, report it to your local Garda station.

Threshold‘s free helpline is 1800 454 454. You can also access web chat on their website threshold.ie .