Criminals are constantly evolving their tactics to deceive consumers and businesses in new ways. Among the forms of fraud seen around the U.S. recently involves wire transfer fraud. This type of fraud can lead to significant financial losses and frustration for people looking to purchase a home, pay employees and accomplish many other common tasks.
The problem reached a new level of urgency in May after the FBI released a report on wire fraud incidents in 2016. According to the FBI, fraud involving wire transfers surged between May and December of 2016, with more than 40,000 incidents reported (only around 22,000 reports were made during the same period of 2015). That means between October 2013 and December 2016, thieves attempted to steal at least $5.3 billion from U.S. consumers and businesses.
Wire transfer fraud has been around for some time, but new cases primarily use email to target unsuspecting customers or business clients. In most recent cases, the scam resembles a common tactic known as phishing: The victim may receive an email that resembles an official request from a business or person with whom they are familiar. The email will ask the victim to make a wire transfer to complete a recent routine transaction, or as an emergency. Messages will often emphasize the urgency of the request or even threaten some form of legal action if money is not received.
Some examples of wire transfer fraud that law enforcement officials have come across include:
- Deceiving corporate employees into releasing sensitive data like tax forms or account numbers.
- Informing victims that they have won a prize from a contest or sweepstakes, but need to pay a fee before receiving it.
- Pretending to be a government official demanding payment for late taxes or fines.
- Pretending to be a friend or family member in urgent need of money.
- Requesting that a bill or invoice be paid via email, rather than by credit card.
Preventing wire fraud
The FBI estimated that perhaps 25 percent of people who come in contact with one of these scams end up simply paying the requested amount. But there are several ways to stay vigilant regarding wire transfer fraud and phishing scams.
Wire transfer services have several legitimate uses and are employed for countless noncriminal transactions every day. But to avoid these scams, don't accept any request to wire money to a person who:
- You have never met in-person, or someone whose identity cannot be verified over the phone.
- Says they are a friend or family member in a crisis, but that you can't tell anyone.
- Says they don't accept any other form of payment.
- Asks you to deposit a check and then send some of it back.
If you've already sent money through a wire transfer for a fraudulent purchase, you may be able to stop the transaction if you act quickly. As soon as possible, call the wire transfer company to report the incident. Unfortunately, it may already be too late to cancel the transaction and get that money back. Still, file a complaint with the FBI or the police to help prevent future instances of wire fraud.
Back to Blog