How to Avoid Wire Fraud & Money Transfer Scams | Ion Bank
Person leans that they have fallen for a wire transfer scam

Electronic fund transfers are convenient for individuals and businesses to pay bills and receive money. Yet fraud can occur when this form of electronic communication is used for criminal purposes. Common scams include fake real estate listings, dating profiles and services like tech support or debt relief.

According to the FBI, wire fraud costs over $150 billion each year. Unfortunately, it’s difficult to recover stolen funds once money has been wired – if not impossible. Whether you’re in the market for a home or like to shop online, keep these tips in mind to avoid wire fraud.

How Does Wire Fraud Work?

When someone poses as a trusted source and requests an immediate transfer of funds, it’s considered wire fraud. One example is the common “romance scam”, which involves creating a fake dating profile to gain the trust of an unsuspecting person.

The scammer will express strong feelings after a short time, then tell the victim they’re suffering from an illness and ask for money. Once the initial wire transfer is complete, they will continue coming up with reasons to ask for more money. In some cases, the scammer may even create a fake bank statement to show they have the funds to pay the victim back. 

Signs of a Money Transfer Scam

It’s important to be vigilant, no matter who has requested money. Red flags include: 

  • The person requesting money has a sense of urgency to complete the transaction.
  • The person cannot verify their identity or provides a fake ID, often claiming to be in the military, on an oil rig or construction project overseas.
  • Something changes during the transaction, such as the recipient’s contact details.
  • You’re sent a refund check for “too much” and asked to wire back the difference.
  • You’re asked to send money to someone in another country.

Ways to Prevent Wire Fraud

To avoid falling victim to one of the most common scams used by fraudsters:

  • Always ask to see what you’re buying before sending money or signing anything.
  • Confirm the identity of the recipient and the bank where the funds will be sent.
  • Do not pay for online purchases via wire transfer or with a mobile payment app.
  • Only send money electronically to people you know and trust.

Real Estate Wire Fraud

One of the most prevalent cybercrimes in the United States, real estate wire fraud occurs when a legitimate listing is duplicated with new contact information. The scammer may impersonate a mortgage lender, real estate agent or property owner and ask for money to be wired for an application or brokerage fees.

To prevent real estate wire fraud, search the listing online and verify the contact information aligns. Also insist on using formal methods for all transactions, like an attorney’s office.

To learn more about protecting your personal information, visit our online Security Center.