Practical Fraud Prevention

Chapter 12. Online Account Opening Fraud

I’m about to give you all of my money…

Otis Redding¹

It makes sense to start the section on banking and the fraud challenges banks and financial institutions face with a look at online account opening fraud. In part, of course, this is because an account is necessary for a fraudster to commit many forms of banking-related fraud. But we’re also starting with this topic because it was the cornerstone of many banks’ fraud-fighting efforts before things moved online, and it remains a crucial step in protecting the entire financial ecosystem from malicious actors. It’s stopping fraud at the door, so to speak.

False Accounts: Context

Perhaps the primary risk associated with online account opening fraud is that of money mules setting up an account for the purpose of moving money around as part of a fraudulent scheme. It’s certainly one of the most memorable risks: people still talk about the 37 money mules acting in concert who moved more than $3 million in stolen funds back when the Zeus Trojan was taking banking by storm.

Money muling was once associated only with young people. But during the COVID-19 pandemic in particular, the age range widened considerably, and now you can find money mules ranging in age from 18 to about 50. Online security specialist Ken Palla, who has many years of experience in the banking space, pointed out to us that there are unlikely to be negative consequences for someone moving into money muling for the first ...