Retail Banking Wire Fraud

A typical retail banking wire fraud takes place when someone withdraws money or steals money from an electronic account of the account holder. Using false information and identity, the criminal is able to access the account information of the victim.

In the banking sector, wire fraud can include the transfer of money from the victim's account to the account of the criminal. In this instance, the criminal can defraud the victim by accessing the account information or by faking the identity.

Transferring money using a wire transfer is one of the most popular methods to transmit money from one location to another in a matter of hours. In fact, we prefer wire transfers because it is an easier method to transfer money from one account to another to almost any bank account around the world.

Why do Wire Transfers Attract Criminals?

The ease of transfer is exactly why criminals also prefer wire fraud. It is easier for the criminal to get money in a matter of an hour before a customer is alerted. Even if the customer is alerted, it is almost impossible to stop the transfer due to the speed of the transaction.

The only way for the victim to get back their money is a potentially lengthy process that may also include a lawsuit. If the wire transfer is initiated to a bank located in another country, getting back your money may be next to impossible.

In the United States, retail banking wire fraud is common due to the increasing use of electronic devices. As such, these electronic devices are used by the criminals to get the information required to initiate a wire fraud.

Wire Transfer Fraud Schemes

  • Account Takeover: Electronic devices have become an integral part of our lives, which makes it easier for criminals to hack accounts. Even if the customer is careful in administering their account, it does not mean that criminals cannot get complete information about the account. It is common for large companies to report data breaches. The breach occurs when a criminal gets access to the information of a bank account. In this case, the criminal will have total control over the victim's bank account without the knowledge of the bank or the victim.
  • Hacking: In this scenario, criminals use phishing methods to lure victims into giving their personal information. For instance, company employees may get an email that resembles a real email sent by a well-known company senior executive. Such email may ask the sender to provide passwords and related information. Tactics can also include infecting the company's systems by malware. Such malware will easily pick secretive information from corporate accounts. The most common method of infection includes downloading an infected file from the Internet.
  • Deception: The least common but equally dangerous technique used by criminals is to gain the sympathy of the victim to wire them the money. This technique is still common because a large number of people are still acquiring skill sets to use the Internet effectively. A victim may get a personal email from a close friend or relative asking them to send the money to their account urgently. The fraudster may create an emergency situation to tempt the victim to send money. Sometimes, the criminal may ask to transfer funds so that they may start a business. Other examples also include promises of large sums of wealth after transferring a small amount for verification purposes.

How To Protect Yourself From Wire Fraud

Based on the frequency and methods of wire frauds, here are important tips you can use to protect your account.

  • Multifactor Authentication: To safeguard access to your important accounts, make sure that there are at least two layers of protection. Besides password access to accounts, it also makes sense to send a verification code to your mobile before accessing the bank account. Such deterrents will ensure that hackers are unable to penetrate your bank information even if they somehow get access to the password. Almost every financial institution and reputable companies offer their customers an option to re-verify their account to confirm their identity. Such safeguards can deter identity thieves from getting full control of the account.
  • Information Sharing: Recent surveys strongly suggest that the major factor leading to hacked accounts is accidental exposure of personal information by the account holder. It means that you should never share your account information or password with anyone over the phone. Always visit your bank to confirm important information required by the bank because it will protect you from phishing attacks and unnecessary disclosure of personal data.
  • Transaction Monitoring: It's not uncommon for banks to integrate advanced software that keeps an eye on the transaction activity of a customer. Based on their profile, settings, and history, the software automatically alerts bank officers and the customer of any unusual behavior. While you cannot build such software yourself, it is your duty to carefully select financial institutions that can protect your identity.

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