DEFINITION of Credit Muling

Credit muling involves acquiring and delivering items fraudulently obtained using credit, making it an example of credit fraud. Just as a drug mule transports illegal drugs, a credit mule transports items obtained dishonestly that have been purchased on credit. Credit mules may not be aware that they are participating in a scam and may indeed think they are working in good faith as an employee or independent contractor of a legitimate organization, such as a secret shopper business.


Several high-profile instances of credit muling have involved cell phones. Criminals pay people to acquire new, high-value phones that come at a discounted price or are free when the consumer agrees to a cell phone contract. The full price of the phone is built into the contract and is factored into the bill for each month of the contract, which often lasts two years. Once the “customer” obtains the contract phone, she turns it over to the criminal, who resells it for full price or even higher on the black market (unlocked, high-end phones command especially high prices).

The credit mule might think she is being paid as a secret shopper and might be told that her “employer” will cancel the cell phone contract. Another possibility is that the “employer” tells the credit mule that it’s her responsibility to cancel the contract. In either case, the credit mule will eventually learn that she’s on the hook for the value of the phone that she no longer has and can’t return to the cell phone carrier. She might also be financially responsible for monthly service charges and early termination fees.

The criminals running these scams tend to target young, naïve or desperate people to become their mules. The mules use their good credit to obtain the phones, get paid a couple hundred dollars cash for their “work,” then later discover that their credit has been damaged and they have unwittingly participated in organized crime.

Because credit mules use their real identities, it is difficult for merchants to detect this type of fraud when it is happening. Many merchants end up charging off these losses. Individuals who suspect or who become victims of credit muling schemes should notify the police and the Federal Trade Commission.