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Pump-and-Dump, Money Mules, and Penis Pills

I hate unsolicited phone calls and email offers I have not signed to. This blog receives over 200 comment submissions daily and some of my email accounts receive even more emails. Thanks to effective spam filtering software I don’t have to read most of them but that doesn’t make me hate spammers less.

All three terms above relate to spam which has become inevitable part of our daily life. I am not going to tell you about Penis Enlargement Pills. I hope you are smart enough to not engage into this type of ripoff. But who are the other two animals?

Pump-and-Dump

You have probably received emails with an embedded image inside selling a penny stock of some small company. That company is real and to make the sale pitch look convincing, the text inside that image often points to real events or a news release.

The economics of this scam is pretty simple. Spammers invest into a penny stock of a small company. Small companies have few outstanding shares and their stock price is relatively easy to sway. People receive email spam, buy the stock, and by doing so raise the stock price short term. Meanwhile the spammers sell the stock profiting from the higher price.

The important part here is “short term”. There is a very good chance the stock will go down the next day or even later the same day. But don’t take my word for it, look at this website that monitors daily stock spam activity. You can see from the charts that buying these stocks is a guaranteed way to lose money!

Money Mules

Another popular type of email spam is aimed at stealing your banking or credit card credentials. This is called phishing. The email sender attempts to obtain your sensitive financial information by impersonating a bank, credit card agency, IRS, or another financial institution. What happens after spammers obtain this data? This is where a Money Mule gets involved.

Have you ever seen ads offering stay-at-home jobs titled “shipping manager” or “regional assistant” and offering lucrative salaries with high commissions? Some of these are attempts to enlist people to transfer illegal funds obtained via above mentioned phishing scam. Many of the spammers operate out of third world countries and don’t have US banking accounts.

Money Mules are spammers’ helpers who represent the last link in the phishing chain. Without a Money Mule, spammers can’t really do anything with the stolen credit card credentials.

You can find a great deal of information about the technology behind spam and other malicious activities from this book: Botnets: The Killer Web Applications


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3 Responses to “Pump-and-Dump, Money Mules, and Penis Pills”


  1. 1 Alex Feb 21st, 2007 at 11:35 am

    It’s penis, not Pennis ;)

  2. 2 Yan Feb 21st, 2007 at 11:43 am

    The typo is intentional to get the spammers off the track. ;-)

    Just kidding, thanks for the heads up. Fixed.

  3. 3 Alex Feb 21st, 2007 at 11:50 am

    No problem. Love reading your blog.

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