Understand Your Finances
6 ways to protect yourself from wire fraud
Wire fraud may sound old fashioned—calling to mind people unwittingly sending money to scammers claiming to be government officials, or relatives in trouble. Those scenarios still happen. But in the digital age, money transfer schemes have evolved as cyber thieves have become more sophisticated.
The internet has made wire fraud easier to commit, and harder to track. In 2017 alone, victims of internet fraud reported more than $1.4 billion in losses, according to the FBI's Internet Crime Complaint Center. Here are seven tips for keeping your money safe from wire fraud:
1. Know the types of wire fraud
Wire fraud generally takes two forms: unwitting participation by account holders, and account takeover. Unwitting participation is the classic wire scam that we've all heard about: a scammer, posing as a government official, relative, or some other trusted source, tricks a consumer into willingly sending money.
The other form of wire fraud, account takeover, involves a scammer seizing a customer's personal information, which can be used to get access to the account holder's funds. In 2017, account takeover fraud grew significantly, with losses reaching $5.1 billion, according to Javelin Strategy and Research, an advisory firm for the financial industry.
2. Work with a trusted financial institution
Many apps and internet tools can help you move your money around, but few are as secure as banks. Financial institutions, including banks, are on the front lines of the battle against cyber criminals, and are constantly researching scams and developing technology to deal with them.
JPMorgan Chase is investing in fraud prevention tools to safeguard its customers' assets and increase awareness of wire fraud. "Our ways to detect fraud are becoming more sophisticated based on some of the investments that we are making in fraud control," says Amanda Gorman, executive director of Digital Risk Management for JPMorgan Chase.
3. Watch for phishing red flags
Scammers can be inventive, and their money requests often seem identical to official correspondence. That's why it's important to pay close attention: if you notice inconsistencies in email addresses and domain names, or if there's a sudden, unexpected change in the email address that you're working with, call a phone number you trust and talk to someone who has been working on your transaction. Don't call phone numbers mentioned in the questionable email.
You should also be wary if someone seems to be pushing you to quickly make a decision or send money. Scammers often try to create a sense of urgency so that their victims won't question why they want an immediate transfer of funds. "If someone tells you there are dire circumstances if you don't send this wire right now, you should be suspicious," Gorman says.
4. Protect your home sale
If you're buying or selling a home, be extra careful. Real estate transactions sometimes move quickly, and buyers can find themselves sending money to several people, many of whom they may not be familiar with. In 2017, according to the FBI, there were more than 9,600 victims in the real estate/rental sector, with losses of over $56 million.
Gorman says a typical scenario might involve a buyer who is getting ready to close on a house getting a message from a fraudster who had compromised a title company's email account. The fraudster might claim that there has been a last-minute change to the wiring instructions, and tell the buyer to wire closing costs to a different account.
In general, the guidelines for protecting against phishing apply to homebuying: Pay attention to urls, email addresses and other details in every message. And, if you aren't sure about the person requesting money, phone someone that you've already worked with and verify the transaction.
5. Sign up for account alerts
Many banks will send digital alerts in response to unusual banking activity and account problems. If your bank offers a digital alert program, sign up for it: these alerts provide an opportunity to be proactive and take immediate action.
Some banks, including JPMorgan Chase, attempt to identify unusual behavior in a customer's account activity. "If our fraud operations analysts see signs that a customer has potentially fallen prey to a scam, they will call the customer to see if the recipient is someone they should be sending money to," says Gorman.
6. Take action—immediately
If you think you may have been scammed, time is of the essence. Contact your financial institution immediately and request that it contact the corresponding financial institution where the fraudulent transfer was sent.
If the wire recently happened, you can also contact your local FBI office. The FBI—working with the Treasury Department's Financial Crimes Enforcement Network—might be able to help return or freeze the funds.
Knowing how scammers work and the resources available to help you fight them is the first step toward protecting yourself against scammers. The more you learn about these pitfalls and the tools available to help you, the better prepared you'll be to protect your finances.
Brenda Richardson is a Chase News contributor. Her work has appeared in the Chicago Tribune and The Washington Post, among other media outlets.