The Bank of the Philippine Islands (BPI) has warned its clients and the public over an industry-wide increase in cases of “money mule,” a form of money laundering that is punishable by law.
BPI chief digital officer Noel Santiago said mule accounts have become more prevalent in the last two years as criminals found an opportunity to take advantage of the rapid digital adoption in the country.
Santiago said money mules facilitate the transfer of illegally obtained money on behalf of someone else. “They are usually used as conduits by criminals so that they can launder big sum of money acquired from crimes like online scams, human trafficking, drug trafficking, among others,” he said.
The activity is prohibited under the Anti-Money Laundering Act of 2001, and those who are proven guilty may face jail time, hefty fines, and account closure.
Santiago said unbanked Filipinos are at a greater risk of being exploited and recruited as money mules. A 2019 record from the Bangko Sentral ng Pilipinas shows that there are more than 51 million adult Filipinos who are still unbanked.
“As in any transition, the criminal minds find ways and means to see where the opportunities are. In the past, to open an account, clients are required to go the branch and present themselves and their IDs — so there’s a natural deterrent for anybody who has an intent to commit a crime or intent for fraud,” said Santiago.
“In the last couple of years, as we shifted to a more digital lifestyle, we made it more convenient for legitimate clients to be onboarded, to be accepted in the financial industry. Now this is where those criminal minds saw an opportunity and say, ‘Maybe I can create digital accounts that can be used as a mule account’,” he added.
Criminals also sought people with existing accounts in exchange for a few thousands of pesos. According to Santiago, they would also advertise on social media to lure people.
“As an example of how these fraudsters do it, they approach unsuspecting victims and ‘borrow’ their account for the purpose of receiving a remittance from someone. They make the story and the delivery so compelling and attractive. Some accounts are being sold for thousands of pesos for usage. They use the social media to advertise and sad to say, some people fall victim to this,” he said.
To address this, BPI said it has been working closely with the Bankers Association of the Philippines to strengthen the country’s cybercrime law.
Santiago said requiring mobile number registration will greatly help to lessen the complexity of dealing and prosecuting money mules.
“We have capabilities to keep track of significant amount, frequency, velocity, and even being able to ascertain through artificial intelligence the possible destination before it gets out of the bank. This is among the many tools and efforts that we have. But we also trust that the legislative branch will expedite the amendment and enactment of policies to protect more Filipinos not only from falling prey to the money mule scam, but also from cybercriminals in general,” he said.
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