Watch Out for Wire Transfer Fraud

Wire transfers are a standard practice for businesses and consumers to exchange funds. But watch out: Wire transfer fraud has risen dramatically, so it is critical that you and your employees understand the risks and become better prepared to protect your business from this pervasive threat.

What is wire transfer fraud?

Wire transfer fraud occurs when a threat actor poses as a trusted authority, such as a bank, vendor, client, coworker, or family member, and convinces victims to send money via electronic bank transfers. It’s so commonplace, Americans lost nearly $8.8 billion to wire transfer fraud in 2022.

Wire transfers are nearly instantaneous and extremely difficult to reverse. Once the victim realizes they’ve been scammed, the fraudster has vanished with their money.

How does wire transfer fraud happen?

While there are many possible ways bad actors can initiate wire transfer fraud, it most commonly occurs in the following ways:

1. Phishing Messages: Scammers send phishing messages demanding payment via wire transfers. They may impersonate legitimate entities or manipulate valid payment information. For instance, your “boss” may email you, asking you to wire them a sum of money for an upcoming project. Don’t buy it. 
2. Business Email Compromise: In some cases, fraudsters infiltrate a business or individual’s email account, infrastructure, or both, and can alter payment details to send wire transfers into their own pockets

How to protect your business from Wire Transfer Fraud

While wire transfer fraud is a real threat, there are a few key steps you can take to ensure your business is not impacted by these bad actors:

1. Verify recipient information: Always double-check the recipient’s name, account number, and routing number before sending a wire transfer. Accuracy matters!
2. CALL and speak with the other party: Always call and speak to the requestor to confirm the validity of the request, the link, and any other information within the request. Make sure you use a contact phone number you already have, not one provided in a fishy email.
3. Be extra vigilant of any new bank information: Businesses rarely change banks, so don’t instantly believe a recipient saying that they have a new bank account.
4. Validate urgent requests: Be cautious if you receive unexpected requests for money transfers, especially if they’re marked as urgent. Verify the legitimacy of the request before acting.
5. Enable two-factor authentication: Add an extra layer of security by enabling two-factor authentication for your financial transactions.

Everyone on your finance team plays an important role

1. Cybersecurity insurance: Verify your business is protected with the right coverage in the event of fraud. Review with your Cybersecurity Insurance Provider and MERIT’s CISO.

2. Use a secure network: Conduct wire transfers over a secure network. Avoid public Wi-Fi or unencrypted connections.
3. Monitor accounts regularly: Keep a close eye on your accounts. Detect any unusual activity promptly.
4. Call your IT vendor if you have reason to be suspicious: Request MERIT’s assistance in reviewing any communication or links prior to engaging with the request.

In the event of wire transfer fraud

If you suspect wire transfer fraud, take immediate action:

1. Contact your bank: Inform your bank immediately and provide all the details you can about the transfer.
2. Contact MERIT: Inform MERIT right away, so we can work with you to review, mitigate, and monitor your infrastructure.
3. File a complaint: Report the incident to the relevant authorities. You may also need to legally notify any impacted parties.