Wire fraud: What it is and how to stop it

Today, scammers mainly use the internet, although phone and text message scams are still fairly common. The latter often target less tech-savvy victims, mostly older adults.

What is wire fraud conspiracy?

Wire fraud conspiracy is a type of crime in which two or more scammers work together to defraud a targeted victim of money, property, or other assets. As in ordinary wire fraud, wire fraud conspiracy involves telecommunication means.

US law enforcement, specifically the US Department of Justice, defines four elements of wire fraud:

1. The scammer must have acted with premeditation and intent to commit fraud in order to obtain money or property from someone.
2. The scammer must have created or participated in a scheme to defraud the victim of money or property.
3. There are reasonable reasons to believe that the scammer would use means of telecommunications or interstate wire communication to defraud the victim.
4. The scammer actually used the means of wire communications or telecommunications to carry out the extortion.

As you can see, actual extortion doesn’t have to happen for the scammer to stand trial as a wire fraudster in the US. It’s enough if there is evidence that they intended to commit wire fraud and defraud the victim of money or property.

Types of wire fraud include several methods scammers use to fool their victims.

The Nigerian Prince scam

The Nigerian Prince scam is one of the oldest and most legendary online scams overall – not just when it comes to wire fraud. The scam is so famous that it has gone down in history through jokes, memes, and pop culture references.

And how does the Nigerian prince scam work? In its traditional form, a criminal poses as a member of a foreign country’s royal family or other important figure. They approach the victim (usually by email), promising them a large sum in exchange for some help, often using tragic stories to elicit sympathy.

The criminal asks the victim to send them a certain amount of money. The explanations vary: sometimes it’s for unfreezing accounts, sometimes for bribing guards, and sometimes for paying bailouts.

Although the Nigerian prince scam is one of the most famous types of online fraud, thousands still fall for it every year. Of course, the scam now takes different forms (it usually no longer features the infamous Nigerian prince), but the principle remains the same. Scammers prey on gullibility and greed – they impersonate investors, CEOs, and others to extort money for a promise to share the profits.

Phishing

Phishing is a type of wire fraud in which a scammer impersonates another person to trick a victim into giving out personal information such as passwords, financial information, or identification numbers. This type of crime most commonly uses emails, text messages, and social media.

Phishing scammers can impersonate co-workers, bosses, bank representatives, or customer service workers. They use social engineering techniques to instill trust in the victim and convince them to provide information. They can also utilize malicious attachments and links in emails and text messages.

Telemarketing fraud

Telemarketing fraud falls into the phone scams category. In this type of fraud, the criminal contacts the victim via phone, taking advantage of the fact that many companies and organizations contact their customers this way, and it doesn’t raise suspicion. Several wire fraud schemes use telephone contact, including:

• Advanced fee fraud. The criminal induces the victim to pay a predetermined amount, for example, to participate in a lottery or purchase some non-existing goods or services.
• Charity fraud. A fraudulent telemarketer claims to represent a charity and asks the victim to donate. Such scams can prey on people’s kindness by taking advantage of events like disasters.
• Summer job scam. A fake telemarketer calls people looking for part-time jobs with the message that they have been selected. However, they request a small fee to cover the cost of training, insurance, work clothes, or work materials. The job, of course, doesn’t exist, and scammers disappear once they get their money.

Ransomware

When a criminal contacts you via telecommunications to transfer money-extorting malware, this can also be counted as an example of wire fraud. Such malware is ransomware – software that encrypts files and makes it impossible for the victim to access them.

Ransomware attacks are designed to extract ransoms, most often paid with cryptocurrency. The software encrypts the victim’s data and then displays a message saying that the data will be restored if the victim pays the ransom.

Ransomware usually spreads via phishing emails, fake websites, and pirated software. Ransomware is also one of the most common cyber extortion tools used to target companies.

Both one-person wire fraud and organized wire fraud conspiracy are federal crimes. Wire fraud punishments depend on local laws, but they often include imprisonment and fines for both individuals and organizations

Wire fraud cases are considered on a case-by-case basis for each use of wire communication. If a given wire fraud scheme consisted of three emails, all three would be regarded as separate acts of wire fraud.

Mail and wire fraud are similar crimes. In both, the goal is the same – to defraud the victim of money or property. Mail fraud, however, uses a more old-fashioned means of communication – the traditional mail. The scammer may send out fake invoices or flyers urging victims to deposit money into bogus accounts.

In wire fraud, the scammer uses electronic communication to defraud the victim. It can be the internet, cell phones, or social media.

Many wire fraud scams succeed because victims don’t notice red flags or know what they should be looking out for. Here are some common signs that someone may be trying to rip you off:

• Strange emails. Scammers who contact victims by email are not always scrupulous. Sometimes, their messages sound unnatural, suspicious, or just plain wrong because they were automatically translated.
• Instilling a sense of urgency. Scammers usually don’t want you to wait and have time to think things over. They ask you to hand over your money or data immediately.
• Playing on emotions. Scammers can manipulate victims by playing on their feelings. They make up tragic stories or hide behind a charitable purpose to get you to take pity and agree to their offer.
• Asking for confidential data. No representative or head of a reputable company asks customers or employees to provide confidential data by email. However, not everyone knows this, so quite a few people are fooled by requests for passwords and other information that could in other ways be abused.

Thousands of people lose their money through wire fraud every year, and that’s just the tip of the iceberg. Wire fraud isn’t uncommon, so it’s always good to be prepared. Here are some tips you can use for wire fraud prevention.

• Use third-party cybersecurity software. Use antivirus software and consider connecting to the internet via a VPN, especially if you use public networks. A VPN encrypts online traffic that fraudsters could use to create personalized attacks against you, making it harder for criminals to obtain necessary information. NordVPN also offers an additional Threat Protection Pro feature that protects you from malicious sites and links.
• Don’t send money if you don’t know who the recipient is. Don’t be fooled by impersonators who claim to be well-known celebrities or important people but ask random strangers for money. If a friend or family member contacts you, make sure it’s definitely them. Contact them by another means of communication if necessary.
• Don’t give out confidential information by email or phone. If a company asks you for such information, don’t write back, or disconnect the call and contact them again. Make sure you use the correct email address or phone number.
• Establish a security code with friends and family. Scammers are getting more creative, and technology is getting more advanced. Criminals can even use voice cloning technology to copy your loved one’s voice and impersonate them to extort money from you. You can protect yourself in advance by setting a code that only you and your loved ones will know, such as the name of your first crush or a pet.
• Sign up for an identity protection plan. There are services on the market that can help you protect your identity. Such services can notify you of known cases of wire fraud or other malicious activities and often offer insurance in case of identity theft. In addition, check whether your bank refunds scammed money, to safeguard yourself in case of a scam.

If you have been a victim of wire fraud and have transferred money to scammers, it’s imperative that you contact your bank as soon as possible and explain the situation. Ask them to freeze your account and contact the recipient bank. They may still be able to cancel the transfer.

If you are in the US, report the matter to the police and the FBI through the FBI’s Internet Crime Complaint Center (IC3). Also, go to your local FBI office and describe the entire situation.

If you are not in the US, immediately report the case to the nearest police station so that they can initiate an investigation as soon as possible. Gather all information related to the case (messages from the scammers, account numbers to which you sent money, etc.) and describe the entire incident in detail.

FAQ

Is wiring money safe?

Yes, wire transfers are generally safe, provided you know the person you are sending money to and use legitimate financial services.

Can a bank trace a wire fraud?

If you sent money to a fraudulent account and reported the matter to the police and your bank, the bank may be able to cooperate with law enforcement to recover the money. In addition, if you notify your bank of the fraud promptly, it may be able to cancel the transfer if it has not yet been sent.