Wire Fraud and How to Prevent It

Contributed article in our cybersecurity series. Enjoy! – Kimberly

The advent of new technologies and the widespread use of the internet have allowed scammers to access and steal personalized information with the aim of using it to commit fraud. One of the most common forms of internet scams is wire fraud – preying on thousands of people every year who fall victim to these kinds of manipulations. Unfortunately, people are often caught by surprise and end up wondering how they fell for such scams.

Therefore, it’s imperative to know how to recognize wire fraud and protect yourself and your personal information from potential fraudsters.

Map Ref: Blackhawk Bank

What is Wire Fraud?

The most common form of wire fraud is when someone represents themselves as a trusted partner, company, or family member and asks for urgent transfer of funds, usually under the guise of an emergency. The scammers are counting on the emotional response of the potential victim. Unfortunately, before they realize that they have not wired funds to a trusted source, the money is gone with no way of retrieving it.

In business situations, fraudsters pretend to be business partners or people within the company (sometimes in higher management echelons). Their goal is to try and persuade the intended victim to send the money to an account they are made to believe belongs to a trusted source. Sometimes, scammers pretend to be family members (a distant relative, grandchild, family friend, new love interest) or people the victim has some emotional attachment with by creating emergency situations where money is urgently needed. One of the most well-known internet-based frauds is the so-called “Nigerian Prince” scenario. The (in)famous scam starts with a person claiming that he is well off and cannot currently dispose of his money but will repay a loan quickly with huge interest. Interestingly enough, it still sometimes works.

It’s almost impossible to trace internet fraudsters nor to recover money once it’s been wired because scammers use various mail addresses. The wire transfers are immediate and are soon transferred again to an untraceable account.

How to Prevent Wire Fraud?

Regardless of the claim to be famous or wealthy and experiencing transitory difficulties, the surest way to avoid wire fraud is never to answer such emails. These are always attempts of manipulation. When you are making wire transfers, you must first be sure of the recipient’s identity, even if that person claims to be a close family member. 

Keep in mind, identities and data can be stolen. First, independently call that family member directly and check if they have recently contacted you with such a demand. This double-checking is the best way to protect your money.

Next, use all available means to protect your personal information and never give it out through email or text messages. Scammers use different tactics to make you give them your bank account, social security numbers, or credit card numbers to try to transfer your funds to their accounts.

Businesses must always verify if any wire transfer request is authentic. This is done by devising and implementing a process for verification that has to be followed by all employees, which will prevent any undue payment based on a fraudulent request. One of the tactics used by fraudsters is to pose as a senior company executive (by creating a fake mail address) and ordering employees to make wire transfers. The experts at Blackhawk Bank advise training and educating employees to respond to such situations and not fall prey to similar scams.

Finally, it’s almost impossible to imagine in advance all the ways scammers try to commit fraud. Still, it is possible to undertake measures that are not too demanding or complicated. The precautions will ensure any wire transfer is based on a legitimate and valid invoice so that you do not fall victim to wire fraud.

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