Cyberfraud on rise: Fraudsters shift focus towards small business accounts; exploit PANs and fake Udhyam certificates

Financial fraudsters are increasingly shifting their operations toward small business and current accounts, using them to move large amounts of illegal funds, executives at fraud-detection startups said.In the past, scammers generally hijacked retail and Jan Dhan accounts and converted them into mule accounts. However, now they are turning to business accounts for the same purpose. “We have seen such cases where mules are getting access to business PANs (permanent account numbers) easily and creating fake Udhyam certificates and using those to open current accounts under fake documents,” said Ranjan Reddy, founder of Bureau, a fraud and risk decisioning startup, as quoted by ET.Udhyam certificates for small enterprises can be obtained online, increasing the scope for misuse.According to Rajit Bhattacharya, cofounder of identity-verification startup Datasutram, banks are encountering a rising number of current accounts that have been taken over and used as mule accounts. As savings accounts face tighter scrutiny with advanced monitoring tools, fraudsters are actively searching for alternative routes to shift suspicious funds, he said.Mule accounts are created when an account holder either gives up access in exchange for payment or loses control due to stolen credentials. These accounts were once mostly linked to poor or migrant workers, but insiders note that small business owners are now becoming targets as well. Fraudsters route stolen money through multiple such accounts to hide the trail.“Scamsters have started using bulk payment methods through these current accounts, which have been taken over as mule accounts,” said Jayaprakash Kavala, chief of products at Clari5. Industry experts added that startups are helping banks widen their surveillance to include business accounts, moving beyond the earlier focus on retail customers alone.