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Wire transfer fraud

Wire transfer fraud definition

Wire transfer fraud is a type of scam where criminals deceive people into transferring them money via electronic means. This usually involves misleading communications like phishing emails or fraudulent phone calls, intended to convince victims they're making a legitimate money transfer.

See also: social engineering, scam, business email compromise, spear phishing

How wire transfer fraud works

  1. 1.The scammer usually initiates contact with the target through email, text messages, or phone calls. They pretend to be a trusted entity, like a bank, a government agency, a service provider, or even someone familiar like a relative or a company CEO.
  2. 2.The criminal then manipulates the victim by creating urgency, fear, or trust. They may spin a tale about the victim owing money to tax authorities, being a lottery winner, or having a loved one in a critical situation.
  3. 3.Once the victim is convinced, the fraudster asks them to wire money to a specific bank account. Thinking the request is legitimate, the victim proceeds with the wire transfer.
  4. 4.As soon as the money is transferred, the scammer withdraws it quickly and disappears. That makes it very difficult for the victim to recover the funds.

Examples of wire transfer fraud

  • CEO fraud, or business email compromise (BEC). The fraudster poses as a high-ranking executive within a company and requests an urgent wire transfer from an unsuspecting employee.
  • Lottery scam. Victims are told they've won a lottery or sweepstakes, but they must first pay taxes or fees via wire transfer before receiving their “winnings.”
  • Romance scam. Online daters are tricked into sending money to a supposed sweetheart who claims to be in dire straits.
  • IRS scam. Scammers pose as IRS agents and claim the victim owes back taxes, insisting on immediate payment via wire transfer.