A wire transfer is a method of transferring money between two parties via their bank accounts, or through financial services companies like Western Union. While some methods of transferring money can take longer to process, or have lower limits, wire transfers allow people to transfer tens or even hundreds of thousands of dollars electronically in a matter of hours.
What is wire fraud?
Wiring money is like sending cash: it’s convenient, fast, and usually final once the bank processes the transaction. And like cash, once sent, it can be very difficult to get your money back. Scammers have been known to use wire transfers to swindle people because the system makes it easier for scammers to take the money and disappear.
What should I watch out for with wire fraud?
Wire fraud is typically just a vehicle for scammers to get your money while posing as someone else. Whether the fraudster is impersonating a government official, a bank official, saying you won the lottery, or pretending to be a legitimate charity, be skeptical of any entity asking you to send large sums of money via a wire transfer.
What are some common wire fraud scams?
One increasingly common scam involving wire fraud is for fraudsters to hack into the email accounts of real estate agents or homebuyers and pose as a bank, title company, or real estate agent to send false wire information to the purchaser. By the time the home buyer realizes they sent their down payment to the wrong account, it can be too late to get back the money.
Another scam involving wire transfers that has been in use for many decades is the 419 scam, also known as an advance-fee scam. Scammers may promise victims a large sum of money on the condition that they first send some kind of fee, typically via wire transfer, before the larger (phony) sum can be sent their way.
Will scammers ever pose as my bank?
Yes. It’s common for fraudsters to impersonate a bank employee and tell consumers that their accounts have been compromised. The scammer tells the consumer that they need to send large sums of money via a wire transfer to protect their funds. These scams are very convincing and appear legitimate. Once the transfer is made, the scammer disappears with the money.
Why do scammers use wire transfers to commit fraud?
Because banks consider wire transfers to be more secure than financial transactions like credit card purchases, there are fewer security procedures in place that can allow for the transfer to be recalled. Though there are instances where a transfer can be recalled, for all intents and purposes a wire transfer is final once it’s sent.
Like gift cards, payments through apps like Venmo, cryptocurrency, and cash, it’s difficult or impossible to recover money for victims.
Once the money is wired, the scammer can grab the funds and vanish.
How do I spot wire fraud?
Wire fraud scammers find ways to make it seem like a wire transfer is necessary. The easiest way to prevent wire fraud is to never wire money to someone you haven’t met in person. No matter what they say, the government will never require you to pay with a wire transfer, and no credible business or person will require wire transfers for payment.
If you’re wiring money, always double, triple, or even quadruple check the wire instructions with the person or institution you’re sending money to. You can always call them on a number you know to be genuine and confirm the account numbers.
Trust your gut, and if something seems off, report it.
How do I get my money back?
If you paid a scammer with a gift card, wire transfer, credit or debit card, or cryptocurrency, contact the company or your bank immediately. You should also frequently monitor your accounts and your credit report in case the scammers stole your identity in addition to your money.
