Scam alert: Shield your business from wire fraud!

What is wire transfer fraud?

Wire transfer fraud (aka wire fraud) is when a scammer uses email, phone or other technology to transfer someone else’s money to their account. Anyone could be a target, but it happens to businesses every day. There are two common approaches a scammer will take:

1. Use social engineering and phishing to gain information that will allow them to hack your account.
2. Trick you into sending the wire transfer yourself. 

Let’s say you receive an email at work from what looks like a trusted vendor. It says, “We switched financial institutions! Please send your next payment to this new account.” Especially if the email looks like previous ones you’ve received from that vendor, you might think nothing of it – but it could very well be a wire fraud scheme. 

Tip: A lot of wire fraud scams happen over email, but keep in mind you could be targeted over the phone. Scammers might call or text from a phone number closely resembling one you know and even use generative AI to impersonate someone’s voice. 

Business email compromise: How it works

Some wire fraud attempts are more generic and less researched; a scammer might cast a wide net by sending the same email to dozens of different companies. It requires less effort but yields fewer results because it’s not as believable. 

There’s a more calculated approach called business email compromise (BEC) that’s tougher to catch. BEC scammers usually:

• Tailor their message to one business or person based on information they found online.
• Impersonate companies using their logos, letterheads, invoice formats and employee signatures.
• Urge you to act: pay an invoice, provide account information, download an attachment, etc.

Tip: Remember, clicking on links and attachments within a malicious email or text could be just as damaging as wiring money to the scammer. They could use malware to gain access to company information like emails about billing, making it easier for them to create fake invoices that don’t look suspicious. Malware could also help them gain other data, including bank account information. 

Identifying vulnerabilities in your business

Some businesses could be more vulnerable to wire transfer fraud than others. For example, you might have a small company with only a few employees and limited vendor relationships. It could still happen to you, but it might be easier to spot before you share information or click suspicious links. 

You could be more vulnerable if you:

• Frequently do wire transfers. If you have money going out on a daily or weekly basis, then receiving an invoice or wire transfer request is just another day. Employees may not catch a scam.
• Do business with foreign companies. Wire transfers are easily accessible around the world and, therefore, a fast and easy way for scammers to get their money. Plus, in some countries, they don’t have to show an ID to collect the transfer. 
• Have a lot of employees. The more people that are involved in your business, the more chances there are for mistakes to be made. Even well-trained employees could fall for carefully curated scams like BEC.

Did you know? Funds lost to wire fraud are nearly impossible to recover. Once you approve a transfer and your financial institution has released the funds, a wire is considered complete and the transferred funds are considered to be the property of the recipient. When in doubt, back out!

Tips for preventing wire fraud

There are things you can do — regardless of your business size or type — to protect yourself from wire transfer fraud:

• Set up multi-factor authentication. If scammers attempt to hack your sensitive accounts, this is an extra step you can take to give them the boot. It only takes a couple of minutes to set up, and you’ll be grateful you did it! 
• Establish a verification process. With every wire transfer request — no matter where it comes from — your business should have a go-to protocol for verifying it’s legitimate. 
• Implement dual control for wire transfers in Online Banking. Dual control requires two people to approve every remote transfer. If one employee falls for a scam, someone else will have the chance to investigate before that money is gone forever.
• Prepare for the worst. Although prevention is the goal, it’s important to have a plan if you do get scammed. Your next steps might include changing passwords across the organization and doing what you can to secure sensitive data.
• Stay updated on financial scam trends. Fraudsters are always coming up with new ways to steal money. A quick read every now and then could save you from losing thousands of dollars.   
• Educate your employees. Everything you learn should be communicated to your team. You’re only as strong as your weakest link when it comes to preventing fraud.