Definition
Mule Account
A mule account is a bank account used, often by unwitting individuals, to receive and move fraud proceeds; spotting and freezing such accounts is a key anti-fraud focus.
A mule account is one through which criminals route illicit money — for instance, funds stolen via scams — to obscure the trail before withdrawal. Account holders may be recruited unknowingly with promises of easy money, or be victims of identity misuse.
Banks and the RBI deploy analytics to detect mule patterns, and accounts flagged as mules can be frozen, with legal consequences for those involved. Sharing your banking credentials or renting your account makes you complicit and liable.
Protecting yourself means never sharing account access, OTPs or letting others route money through your account, and being wary of offers to use your account for a fee.
Related terms
- ChargebackA chargeback is the reversal of a card or digital payment initiated by the customer's bank, typically for fraud, non-delivery or a disputed transaction, returning funds to the customer.
- Two-Factor Authentication (Payments)Two-factor authentication requires two independent proofs of identity — such as a password plus an OTP — to authorise a payment, a long-standing RBI requirement for many transactions.
- Digital Arrest ScamA digital arrest scam is a fraud where impostors posing as police or agencies coerce victims via video call into transferring money under threat of fake arrest.
Plain-English explainer from The Dispatch Investors Encyclopedia. General information, not financial advice.