What is Wire Fraud?
If you’re a criminal and you want to steal someone’s money, the first thing you do is try to target people who do a lot of wire transactions. Those people generally fall under certain categories. The most common category for consumers to be aware of is real estate transactions. Most people generally don’t engage in a lot of wire transactions – except when they buy a home, or buy a business, or sell a business, or sell a home. It’s not something that people do a lot of, so they’re not prepared to deal with the risks.
A typical case involving diverted wire money would involve a transaction that has been set up: there’s a date on which everyone is going to settle the transaction and the money is going to be transferred. At some point right before the wire is supposed to happen, an email is sent – usually from the person who’s supposed to be receiving the wire and that person will send an email, or will appear to send an email, saying, “Hey, I know we agreed on wiring the money to this bank, but, due to change of circumstance, I’d like you now to wire to this [other] bank.” And too often, the person doesn’t pick up the phone and verify that the change was legitimate. It turns out that the person who was supposed to receive the wire never sent that email. His email account was spoofed, and it was a bad actor pretending to be that person. That email looked exactly like an original email from that person because they’ve spoofed it.
So that’s where we are now with this trend of intervening in wire transactions and stealing the money. We’re there now because the title companies and larger entities that deal with real estate transactions and deal with a lot of wires have already been victimized by this. And they have put into place procedures to avoid it from happening again. But every one of those procedures involves phone calls. If there’s one thing I could instill in all consumers who are about to do a wire transaction it’s don’t just rely on email. Don’t rely on electronic communications, hear a voice, verify the numbers, make sure that you’re sending the money to the person who’s supposed to receive that money.
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More Q&As on this Topic:
- What is wire fraud?
- Who is responsible if I am scammed in a wire transaction?
- Why has there been an acceleration of wire fraud?
- How can a bank be held responsible in a wire fraud case?
- What are the risks of wire transfers?
- What are banks obligated to do in Colorado in a wire fraud case?
- Do banks have a responsibility to try to interevene in potential wire fraud?
- What are banks’ obligations in wire fraud cases?