Wire Fraud: How to Avoid it and What to Watch For

Since the rise of technology, there are several tactics used by scammers to steal information in hopes of using it fraudulently. One scam tactic that is repeatedly used on the internet is wire fraud. Wire fraud is one of the oldest internet scams, as fraudsters want a quick and easy way to manipulate people into handing over their hard-earned money.

To reduce the risk of wire fraud, be sure to ask yourself these questions before initiating a wire transaction.

• Is this an entity or person you normally make payments to via wire?
• Are the payment instructions different than in the past?
• Have you spoken directly with your payee regarding the change/request? It’s the best way to ensure the change/payment request is valid.

We also recommend you follow these tips to help avoid falling victim to wire fraud.

• Know Your Recipient. First and foremost, NEVER wire money to a stranger — no matter the reason they provide. And if you’re paying money to a vendor you’re not familiar with, search the company’s name online with the term “scam” or “complaint.” Read what others are saying about the company. Only purchase merchandise from reputable dealers or establishments.
• Verbally Confirm the Request. Fraudsters are using email to request wire instructions. Always call your beneficiary from a number you have on file for them and verbally confirm the details of the wire instruction, including account number, name on account, bank, etc.
• Verify Before Clicking or Opening. Although links and attachments may appear to be from someone you know, it may be a fraudster phishing for your password, business bank account, or other sensitive information.
• Double-check the Email Address. Fraudsters are tricky and can create email addresses that look very similar to a legitimate account. They often find naming conventions for a company’s email accounts on its website and use those to fool you — inspect closely!
• Do Not Reply to Emails as Verification. Don’t respond to the requester by email. The fraudster either controls the spoof email account or has gotten access to the valid email account and can write back, making it look legitimate when it’s not.
• Beware of a Sense of Urgency. Usually, fraudsters will indicate that the funds need to be wired right away. These requests often ask that the client be contacted only through email instead of other channels.
• Be Wary of Using Free, Web-based Email Accounts for Your Business. These email accounts are more susceptible to being hacked. Make sure at least two-factor authentication is available.
• Monitor Your Accounts Online. Make sure you have access to online banking to monitor all your account activity, including wire transfers and ACH.

When it comes to protecting your business from wire fraud, you can never be too careful. While following the tips above can help minimize risk, it’s also important to watch out for these business scams.

• Business Email Compromise (BEC) and Phishing Scams. BEC scams target companies that may make wire transfers to suppliers and businesses. BEC scams begin with a criminal sending a phishing email to a company that seems to be from someone they know. The employee clicks a link or provides their password, business bank account, or other sensitive information, and the fraudster gains access to the employee’s email account. The fraudster will monitor that employee’s email for a period of time and determine who initiates and requests wires.

• Senior Executive Spoofing Scams. In this type of scam, a company employee will receive a transfer request via email from what appears to be a high-level executive. The domain will look very close to the company’s domain and appears to be an email from the CEO or a similar company manager. However, the request is actually initiated from a hacked email account, or an account that has been “spoofed” to appear legitimate. The fraudster creates a sense of urgency and rushes the employee into making a quick decision to send the transfer before researching and verbally confirming the request.

• Overpayment Scams. Another example of a fraudster posing as a trusted vendor is when fraudsters send a check for more than the agreed-upon amount of an actual vendor and then they insist that the overpayment be wired back to them. Later, the check gets returned, leaving you liable for the entire amount.

• Vendor Spoofing Scams. An employee receives an email or phone call from a trusted vendor requesting a change in payment instructions. Without due diligence and validation processes to confirm the request, the employee transfers the funds to the fraudster’s bank account. Usually, these wire requests closely mimic a legitimate request that you’d typically receive from that supplier.

At VeraBank, we’re committed to helping our customers stay on top of the latest fraud threats. Whether it’s information about safeguarding from fraud or offering products and services to keep you or your business transactions secure, we’re here for you — so don’t hesitate to contact us with any questions.

If you're a victim of a wire transfer scam, report it to us immediately by calling us at 877-566-2621 or requesting help and support. You can also report the scam to the Federal Trade Commission at ReportFraud.ftc.gov.