Businesses typically use wire transfers to move funds electronically between different accounts. They can use them to pay bills, fund contracts, purchase inventory, buy equipment, and pay employees, using a bank account number, the bank’s routing number, and an authorization. If a scammer can obtain that information, they can attempt a fraudulent wire transfer to move the victim’s funds into their own account. Once the money is transferred, it cannot be reversed.
How Wire Transfer Fraud Happens
Scammers employ many methods to steal bank and other account login information. Email phishing or Business Email Compromise (BEC) is the most common. The scammer sends an email made to look like it’s coming from a legitimate source, such as a vendor, financial institution, or even a colleague. The email includes an urgent call to action encouraging you to click on a link. It could be an account alert, a request for payment, or a request for information.
When you click on the link, you are redirected to a legitimate-looking website where you are invited to log in. The phisher captures your log-on or personal information so it can pose as you on the actual website and proceed to drain your funds or spend your money.
With their experience and success, phishers continue to perfect their techniques for disguising their emails and making them look more authentic, even personalizing them with information about you they find on the web. They send thousands of these fake emails each day, knowing that someone will bite.
You are the First Line of Defense
You can reduce the likelihood of success of any type of wire transfer fraud initiated against you. Education is the key educating your employees on the risks, vulnerabilities, and, specifically, what to look for before executing a wire transfer.
Watch for phishing expeditions: Cyber thieves have become very sophisticated in how they can mask phony emails to make them look like legitimate requests for money. Closely scrutinize emails for inconsistencies in email addresses, domain names, and salutations. If anything appears remotely suspicious, call a phone number you trust and talk with someone familiar with the transaction you’re working on.
Be cautious of urgent calls to action: Be suspicious if you are urged to make a quick decision. Scammers try injecting a sense of urgency into their emails to spur an immediate response.
Verify email requests: In some instances, an executive’s or vendor’s email account is compromised, making it appear that the request is coming from a legitimate source. Always contact a transfer recipient by phone to verify the request. Consider it a red flag if you are unable to reach them.
Take immediate action: If you think a scammer has victimized you, contact your financial institution immediately and request that it contact the recipient’s financial institution.
Although banks are also becoming more sophisticated in detecting and preventing wire transfer fraud, each business must be its first line of defense in stopping it at the source. Make it a priority to educate all employees on how to prevent wire transfer fraud.