Wire Transfer Fraud and How to Prevent It

Wire transfers are a common way to transport large sums of money. Enterprises that handle wire transfers need to be prepared to manage the risks that exist with these sorts of transfers. Criminals have worked to steal close to $5.3 billion through email schemes having to do with wire transfers in 2016 alone. The risk has grown so much in recent years that the United States Federal Bureau of Investigation has issued a warning to businesses about email scams targeting enterprises that use wire transfers.

Wire Transfer Fraud

Why Are Wire Transfers Important?

Wire transfers are essential in the corporate world because they allow for the quick transfer of funds. They are usually very reliable and safe. In fact, wire transfers are considered much safer than checks. Most wire transfers can be completed within one or two days. Large financial institutions and businesses use wire transfers regularly to deposit and send money.

How to Safeguard Against Wire Transfer Fraud? 

Education is the best defense against scams involving wire transfers. Employees of organizations that routinely transfer funds must be educated regarding the potential for fraudulent wire requests. Departments that handle finances accounts payable, and wire transfers need intensive training regarding what to look out for and how to handle all wire requests. This can be especially important for events where employees receive a request for a high-value wire transfer from what appears to be the account of an organization’s senior management. In addition to education, any enterprise that deals with funds or sensitive information should have a comprehensive, system-wide plan in place for financial fraud prevention and detection. This includes a platform that detects hacks and keeps any information that could be exploited and used as part of a wiring scam safe from penetration.

How and Why Wire Scams Work?

Wire transfer scams trick people into wiring money to fraudulent accounts. Hackers will routinely target employees of enterprises that handle large sums of money. Employees may think that they are receiving orders to transfer thousands or millions of dollars from high-ranking managers within the organizations that they work for. Email-spoofing viruses can mirror the email accounts of workers inside organizations. In wire transfer scams, the money that is wired is actually sent to an overseas bank account belonging to a criminal. The funds sent to these accounts cannot be recovered once they are gone. Wire transfer scams can also include wiring sensitive data, tax reports, and wage information to fraudulent accounts.

Given the amounts of money at stake in wire transfers, companies need to be sure to integrate foolproof systems to prevent the risk of fraud when wire transfers are in play.

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