How Wire Transfer Fraud Works
Criminals find people who are involved in a wire transaction by whatever unscrupulous means possible (hacking your email account, stealing your login information, gathering information via phone, etc.). Then they send you an email posing as someone involved in that transaction, such as a title company, or even as the buying or selling party. They give instructions in the email on where to send your money for the transaction. Instead of that money going into the intended account, it is delivered to the fraudster’s bank account. Often it is quickly moved from that account into an off-shore account. Money that is stolen this way is typically impossible to recover. If you have not done your due diligence to make sure the wire transfer information is legitimate, you may lose a very large sum of money. After you transfer the funds, contact your title company again to ensure that the funds have been received.
Red Flags
Here are some red flags to watch out for:
•The email you receive from the alleged title company you are using uses generic wording such as, “I’m with your closing agency.”
•The email has misspelled words.
•The message uses words like urgent and changes the original wire transfer instructions.
•An email has the word “kindly” such as “kindly send the wire to” is almost always a scam.
•Never click on links in emails.
•Never share financial information over the phone to someone you don’t know that calls you, hang up and call a known number for your bank.
•If you are being rushed to send funds or told it is an emergency, slow down and ask questions.
Types of Wire Fraud
Real Estate Fraud – Discuss the closing process with your real estate agent in person. It’s a good idea to agree on a password that trusted parties and use on future phone calls. Never rely on information contained in an email(especially phone numbers) and instead call the Title Company by looking up their phone number yourself online or using a number they handed to you in person at any point in the process. Ask the title company if they have sent an email and to confirm all the information in the email if they have. Wiring information changes are almost never changed during a transaction.
Overpayment Scams on online marketplaces - In this scam, fake buyers claim they accidentally sent too much money via wire transfer and ask you to return the difference. If you do this, the scammers will rescind their initial payment, leaving you out of pocket. Be wary of buyers who offer more than the asking price, or anyone who quickly sends you more money than agreed. Check email addresses carefully. Scammers use fake email addresses with minor tweaks to trick people into thinking they are communicating with real companies.
Advance Fee Scams for Fake Loans - When people need money to help with their mortgage payments, auto repairs, or credit card scammers can lure victims into traps with promises of “guaranteed loans.”. Ignore ads that claim to offer credit regardless of credit history. If it sounds to good to be true, it’s probably a scam. Never pay upfront fees for a loan. Scammers might tell you that your loan is approved; but if they want you to first pay fees for “insurance” or “processing”, you should end all contact. Hangup on any robocalls received immediately as your responses can be recorded and used for future calls using Artificial Intelligence.
“Processing fees” for fraudulent sweepstakes or lottery winnings – Don’t share your financial information to “increase your odds of winning”. Real sweepstakes are free, so you should never have to give your credit card/debit card/bank account number at any point. Never pay to get a prize and end communications with callers if they persist and tell you that a payment is needed to cover taxes or shipping charges.
Fake Check Scams - Fake check scams come in different forms. But a recent variation starts with a job offer for a work-from-home position. As part of the contract, your "new employer" will send you a check to deposit and request that you wire some of the money to the sender or one of their associates. Never cash a check to send wire transfers, gift cards, or cryptocurrency to a “new employer” or anybody whom you don’t personally know and trust.
Other Scams to be aware of
Family Emergency Scams - In this con, you receive an urgent call or text message about a family member in a dramatic situation, like a car accident or medical emergency. Agree on a family passphrase that everyone must use in a bad situation.
Rental Apartment and Home Scams - Don’t wire money for a house until you have visited the property and met the owner/ agent in person.
Tech Support scams - In tech support scams, fraudsters cold call or text people and impersonate support staff from reputable tech companies, such as Microsoft. The fraudulent callers claim there are issues with your computer and demand payment to fix it.
Business Email Compromise(BEC) – Phishing scam to trick people at companies into either sharing confidential information or making wire transfers to fraudulent accounts.