Fraudulent wire transfers have historically been a focus for many years. As Tetra Defense (tetradefense.com) explains, the term “Wire Transfer Fraud” comes from the original version of this crime — transferring funds between banks across telegraph wires and, shortly after that, phone lines. “Wire transfer fraud has since grown to cover any bank fraud that involves electronic communication mechanisms instead of face-to-face communication at a financial institution,” notes Tetra Defense.
Wire fraud involves using some form of telecommunications or the internet, notes Investopedia.com. These can include a phone call, fax, email, text, or social media messaging.
With so much business conducted remotely, fraudsters use this lack of visual identity verification to make illegal transactions. Tetra Defense notes that they will either trick an individual into transferring money to their bank account instead of the intended recipient’s or deceive the party into thinking a transfer of funds is necessary when it is not.
Despite carrying hefty penalties (up to 20 years in prison and fines of up to $250,000 for individuals), wire fraud continues to escalate. Versions of this fraud include the traditional telephone call; others leverage elaborate stories or the popularity of social media. The bottom line? Be skeptical, and don’t be fooled.
Consider these wire transfer schemes shared by Investopedia:
- Mysterious phone calls: these may prey on the lonely, the elderly, or those experiencing financial difficulty. Unfortunately, the most vulnerable are the most likely to succumb. Fraudsters may share a hard-luck story or pretend to be someone the victim knows to get money.
- Bogus social posts: With the appeal of today’s wide-ranging social media, bogus social posts with tales of misery, get-rich-quick offers, and matchmaking opportunities draw victims in. They almost always ask for cash.
- Nigerian Prince Scam: One scam that’s circulated for years features an email, text, or phone call claiming to be from a Nigerian prince who is down on his luck, usually exiled, and can’t access the fortune in his Nigerian bank account. He claims to need the victim to “hold his millions for him” and promises to give the target a handsome sum in return. The scam’s goal is to obtain the target’s financial information, which the scammer will use to access the target’s money.
- Phony heartstring stories: Other scam variations may be a long-lost cousin needing money, a desperate grandchild asking for funds, or a traveler who needs help to get back into the US.
Read more here.
Other signs it may be a wire transfer scam:
- You’re unexpectedly asked to wire money: Be cautious of sending money to the government, IRS, a friend or family member, or other seemingly legitimate entity. Instead, terminate the conversation, and contact the individual or business independently.
- You’re sent a check in exchange for a return payment: Fraudsters may mail a physical cashier’s check, money order, or personal check, ask you to cash it, and wire the money back. It may be under the guise of a lottery or prize. Please do not attempt to cash the check; it’s bogus. By the time you’ve wired the money, you’ll discover the check is fake.
- You’re asked for a confirmation code before withdrawing funds: You will never be asked for a confirmation code to pick up wired money.
- You’re asked to wire money to another country: Watch for typos that signify the request is bogus, perhaps from a foreign scammer. Conversely, American fraudsters may ask you to send them money overseas.
Read more here.
Never send money to a stranger.
If you get messages or solicitations to send money to a stranger, delete them immediately. Don’t get taken with bogus stories or offers; be skeptical and don’t act on impulse. To protect yourself, hang up the phone and/or delete the email or text message. Don’t respond in any way! If you do send money to a stranger, understand that, more than likely, the money will be gone.
Trustworthy financial institutions are also doing their part by implementing multiple-party verification steps to help ensure any wire transaction is authentic and that the account information is accurate.
If you believe you’ve been in contact with a fraudster, contact us right away. We can assist and share the necessary steps to take. Additionally, the FTC is always a solid resource for understanding fraud. And remember, never send money to a stranger.