SEC warns public: Beware of money muling

MANILA, Philippines —  The Securities and Exchange Commission (SEC) has warned users of e-wallets and similar financial platforms against lending their accounts to other people as they may be utilized for money muling activities.

The SEC has urged the public, especially individuals and companies with registered bank accounts, e-wallets such as GCash and Maya, online financial platforms such as Palawan Express or other financial accounts, not to share, lend, rent out or allow other people or entities to use their personal financial accounts.

The agency said individuals or companies with these financial accounts may be used as money mules by criminal syndicates to perpetrate various financial scams.

In particular, they may be used as mule accounts or for money muling activities in financial scams, including advance fee loan scams, Ponzi schemes, illegal investment-taking  schemes, money laundering activities and other illegal activities.

The SEC said that mule accounts or money muling activities, such as allowing bank accounts, e-wallets and other online financial platforms to be used by other persons or entities for the purpose of obtaining, receiving, depositing, transferring or withdrawing proceeds that are derived from crimes, offenses or social engineering schemes, are prohibited under the  Anti-Financial Account Scamming Act.

“Anyone caught as money mules or found to be engaging in money muling activities may face imprisonment of up to 14 years or a fine of up to P5 million, or both at the discretion of the court,” the commission said.

E-wallet giant GCash earlier said that it has been working with law enforcement agencies to arrest fraudsters encouraging money mule activity.

Further, GCash said that it rejects or proactively bars accounts detected to be used for mule activity.

Meanwhile, the SEC said that persons or groups claiming to represent or be affiliated with lending or financing companies registered  with the commission have been found to be victimizing the public through a scheme called advance fee loan scam.

Under such scheme, victims are required to pay a certain amount  in exchange for the release of a loan.

According to the SEC, victims are drawn into paying the amount asked as they are promised that the advance payment will be returned as part of the loaned amount.

However, upon payment, the SEC said that the loan would not be released and more reasons would be given to the victim to get more funds in exchange for the release of the money.

“The commission hereby informs the public that registered lending and financing companies do not require advance fees, payments or proof of capacity to pay by giving an advance payment,” the SEC said.

“Any fees imposed by lending or financing companies in the processing of loan applications are deducted from the amount loaned and what the applicant will receive is net of the amount  loaned. Applicants are not required to make an advance payment, for whatever reason, as a condition for the release of the loan,” it said.

The SEC is strongly advising the public not to transact with any  person claiming to represent a registered lending or financing  company that requires them to pay out cash in exchange for the approval or release of their loans.

It said that claims that advance payment is required by the SEC prior to the release of a loan are false and contrary to law.

“Persons who encounter this type of scam should not make any payment but immediately report the incident to the Philippine National Police, National Bureau of Investigation and the SEC,” the commission said.