Wire Transfer Scams

Posted: April 1, 2019

A member is at home, using their phone to prevent themselves against wire transfer scams.

We’ve all heard of Nigerian Prince money scams. All he needs is a few thousand dollars to return back to his normal life and then he’ll reward the person with riches. Eager at the promise of riches, the person sends the money through a wire transfer. However, it’s already too late when they discover the deceit. This may sound like something from the past, but fraudsters have grown smarter and people still fall victim to these kind of scams every day. Below are some common scams and the questions you should ask yourself before making the wire transfer.

#1 The fiancé or fiancée who needs cash

In the world of online dating, it is entirely possible for people to fall in love before they even physically meet. Perhaps you’ve Skyped with this person for months or even a year. You’ve taken the time to get to know them, begin to trust them and even fall in love with them. Then one day, they reach out to you with some terrible news and they need money fast. Of course, you want to help your loved ones, but before you send over your life savings, ask yourself these questions:

  • How well do I know this person?
  • Have I ever met them in person?
  • Have they asked me to send gift cards instead of regular money?
  • Does anything feel off about doing this?

Before you wire this person money, take some time to investigate the situation. If it turns out that this person doesn’t exist or was deceitful, you can’t get back your money once it’s gone.

#2 Phony investments

Scammers are becoming increasingly good at collecting your information and using that to send you fraudulent communications from investment firms or financial institutions you transact with. If you receive an email from your investment firm stating that you need to pay $500, take some time to investigate. Ask yourself:

  • Are they asking me to send the money to a person instead of their business?
  • Have I received communications from them like this before?
  • Am I even due to owe money right now?

Before you send money, call the firm or institution with a number from their website, not any number provided in the communication. Explain the situation to decide if it’s valid.

#3 The family emergency

Your grandchild calls you, explaining that there has been a terrible accident and they need money fast. To put you at ease, they’ll share information about themselves that may seem personal and completely identifiable. Before you send money to your loved one, consider the following:

  • Did this person call from a number you recognize?
  • Have you spoken with this person in a while?
  • Does their situation seem legitimate?

If you’re feeling uncomfortable with the phone call, or the person becomes aggressive while speaking to you, hang up and contact your loved one through the mode of communication you normally do to confirm their situation.

#4 The IRS scam

Unfortunately, this scam is one of the most effective scams out there in getting people to wire money. The IRS calls, emails or texts you, threatening to throw you in jail if you don’t pay your taxes. Panicked and confused, you rush to your financial institution to send the money you “owe” to the IRS. Before you wire money to the IRS, ask yourself:

  • Why would the IRS call me instead of sending a letter?
  • I paid my taxes; how could I possibly owe more?
  • Does the information the “IRS” provided actually match what they have on their website?

Fraudsters who use this scam like to create a sense of urgency with their threats. They’re trying to get you to act fast so you don’t take the time to question the legitimacy of the scam. Remember, the IRS will ONLY contact you via US Mail, never by phone or email. Take a moment to investigate further before you send money you can’t get back.

#5 Email compromise

In the era of data breaches, an established business may have their email system hacked. The hackers will then interact with clients of that business advising them of new wire transfer instructions for various reasons. Maybe the business claims to have changed accounts or is having difficulty with certain accounts. What’s really happening is the fraudster is the one sending the new wire instructions and directing it to somewhere other than the actual business. To prevent potential fraud, you should do the following:

  • Call the company directly from a number you know and have used before. Do not use the number and contact info listed in the email.
  • Confirm with the company their security status and if these wire transfer instructions are legitimate
  • Do not respond to the potentially fraudulent email, especially if this company has never emailed you before

Hackers are getting better at targeting people through companies they have a relationship with. Be extra cautious opening attachments and responding to emails that seem out of character for that company.

#6 Title company fraud

Wire fraud has also been seen in home purchases where a title company's email system is hacked. The buyer receives an email from the alleged title company with new wire instructions to close on a home purchase. The buyer doesn’t realize the title company's email was hacked and follows the new wire instructions sending the money to somewhere other than the actual title company. Before you transfer the money, contact the following people via a phone number you’ve used before:

  • Your mortgage lender to confirm if this information is true
  • Your title company to inquire about the change in wire transfer information
  • Your financial institution to see if they’ve heard of this issue happening recently

These fraudsters are preying on people who are trying to complete their home buying process. Confirm with your title company via phone if the directions you’ve received are true. This way, you won’t lose out on money that was meant for purchasing your dream home.

As technology, and how it affects your finances, continues to evolve, we’re taking every precaution to ensure that our members’ accounts and money are safe. If you find yourself in a situation where someone is demanding money from you via wire transfer, take a moment to investigate and gather more details. We want to educate our members and help them keep their finances secure. If you have more questions on how to prevent wire transfer scams, visit a branch location near you or call us at 262-796-4500.