Transferring money through wire can be a risky endeavor – especially if you don’t know the other person well. Unlike using a credit card or writing a check, wiring funds is more like handing over a stack of cash -- once the other party gets it, it’s almost impossible to get back. The best way to prevent losing money is recognizing a scheme before sending any, but if you are not so fortunate, there are several agencies to report wire transfer fraud to.
A wire transfer is a means of quickly transferring funds electronically from one person or organization to another. It is such an expeditious and frequently used way of transferring money that the Federal Deposit Insurance Corporation estimates that more than one trillion dollars exchanges hands by wire transfer each day.
Wire Transfer Fraud
Many scammers choose to use wire transfers because the money comes quickly and is like cash; once the scammer receives the money it’s almost impossible to get it back. Perhaps you receive an email from a prince in another country who needs money to access the billions of dollars in his frozen bank account, or the romantic interest you met on an online dating site lost his debit card while attending to business in a foreign country. Whatever the story, with wire transfer fraud, it always ends with a request to wire money.
Read More: How to Trace a Wire Transfer With the Federal Reference Number
Signs You May Be a Potential Victim
The best way to protect yourself is to be aware of the common fraud schemes identified by the FBI, such as telemarketing fraud, Nigerian letter fraud, investment fraud, internet auction fraud and advance fee schemes. Other scams involve classified ad purchases, fake lotteries and “relatives” in need of help. Other red flags include being asked to wire money to someone you do not know well or when the request originates from another country. Finally, it is prudent to verify that the requesting organization actually exists before sending money.
Reporting Wire Transfer Fraud
As with other crimes, your local law enforcement agency is likely the first place you may want to report wire transfer fraud, along with the fraud reporting division of the wire transfer agency you used to send the money. You can also report wire transfer fraud to the FBI through one of the channels identified on its Report Threats and Crime webpage.
- Federal Trade Commission: 10 Ways to Avoid Fraud
- Federal Deposit Insurance Corporation: Risk Management Manual of Examination Policies, Section 4.6 - Miscellaneous Banking Activities
- Washington State Office of the Attorney General: Wire Transfer Scams Take Many Forms
- Federal Bureau of Investigation: Common Fraud Schemes
- Federal Bureau of Investigation: Report Threats and Crime
An attorney for more than 20 years, Cara O'Neill currently practices in the areas of civil litigation, family law and bankruptcy. She also served as an Administrative Law Judge and taught undergraduate and graduate courses in the areas of employment law, business law and criminal law for a well-known university. Attending the University of the Pacific, McGeorge School of Law, she graduated a National member of the Order of the Barristers - an honor society recognizing excellence in courtroom advocacy. She is currently licensed in the state of California.