Mule accounts: what they are, and how ordinary people become one

Every rupee stolen in an online fraud has to go somewhere, and it cannot go straight to the fraudster. It moves through a chain of ordinary bank accounts first, each hop making it harder to trace. Those accounts are mule accounts, and a large share of them belong to people who had no idea what they were part of.

How accounts get recruited

• The part-time job. 'Receive payments for our company and forward them, keep 2% commission.' No work, generous pay, done from a phone. This is the most common route and it is aimed squarely at students.
• The rented account. Someone offers a flat monthly fee to use your account or UPI ID. In some cases the account is opened at their request, with your documents.
• The favour. A friend or relative asks you to receive a transfer because their own account is 'blocked' or 'under limit'.
• The romance or investment setup. Money arrives from a stranger with a reason, and you are asked to send it on.
• The unwitting trade. You sell something — including crypto — and the buyer pays with money that turns out to be stolen. You never agreed to anything, but your account is now in the chain.

What happens when an account is flagged

1. 1A victim files a complaint

   The fraud is reported on the National Cyber Crime Reporting Portal, and the receiving bank and account are identified from the transaction trail.

2. 2A hold goes on the account

   Usually a lien on the disputed amount, though banks frequently restrict the whole account rather than the sum in question. Cards and online access stop working, often with no advance notice.

3. 3You find out by accident

   Most people discover it when a card is declined. There is often no call and no letter first.

4. 4You have to answer it

   The bank is executing an instruction from an investigating agency and cannot lift it on its own. Clearing it means responding to the officer with an account of where the money came from.

5. 5It follows you

   A reported account is not just an inconvenience for a fortnight. It can complicate opening accounts elsewhere and, where knowledge or recklessness is alleged, expose the holder to prosecution.

'I did not know' is a defence, but not a shield

Genuinely not knowing matters, and it is the difference between a documentation problem and a criminal one. But it does not stop the freeze, and it is not self-proving. What supports it is the same thing that supports any innocent explanation: records showing the credit was consideration for something real, from someone identifiable.

This is why a documented trade with a named counterparty sits in a completely different position from a bare transfer from a stranger. One has an answer. The other has your word.

How to stay out of it

• Never let anyone else use your account, UPI ID or debit card. Not for a fee, not as a favour, not temporarily.
• Refuse any 'job' that involves receiving and forwarding money. There is no legitimate version of this role for an individual with a personal account.
• Never accept a payment from a name that does not match who you are dealing with. In a trade, a mismatched sender is grounds to raise a dispute rather than release anything.
• Do not take payment off-platform. No order record means no way to show what a credit was for.
• Keep records for at least a couple of years. The complaint that reaches you may concern a transaction you have completely forgotten.
• Be suspicious of generous rates. Somebody paying well above market is paying for speed and no questions.

If your account has already been frozen

Do not wait for it to resolve itself, and do not keep visiting the branch hoping for a different answer. The steps that actually work — getting the lien reference in writing, assembling the trade record for that specific credit, and replying to the investigating officer rather than only to the bank — are set out in what to do when your account is frozen.