White Collar Crime: Can You Still Recover Funds From Wire Transfer Fraud?
Due to their speed and simplicity, wire transfers have been commonly used throughout the world, including in the US. It allows you to transfer funds and pay suppliers, contractors, or employees in real time without physically paying in cash.
You only need to log into your online banking account to complete the bank wire transfer. Note that you can send the money between banks or through a transfer service, such as Western Union. While this method is fast and convenient, it involves several risks, such as malware, bank errors, and fraud.
Fraudsters use wire transfers as part of their scams. In the US alone, consumers lose millions of dollars every year to these scammers. Wire fraud in real estate is notably one of the fastest-growing white-collar crimes.
A 2020 Internet Crime Report also reveals that the FBI's Internet Crime Complaint Center (IC3) received 791,790 complaints. Moreover, victims reported losses of about $4.2 billion. Therefore, it’s not difficult to conclude that money transfer is susceptible to fraud.
However, what happens when you lose your hard-earned money to a fraudulent bank account? Can you retrieve your money? Read on to find out whether you can recover money that you lost because of wire transfer fraud.
Overview of Wire Transfer Frauds
Wire transfer fraud is a type of wire fraud. Under section 1343 of 18 US Code, wire fraud involves using wire, radio, or television communication to devise a scheme or artifice to defraud. In a wire transfer fraud, a scammer poses as a reliable source, such as a vendor, company, or a family member, and requests you to immediately transfer funds.
Fraudsters will provide victims with wire instructions and have the money sent to fraudulent bank accounts. However, in reality, the account will transfer the funds directly to the scammer's pocket instead of the intended recipient bank.
Other scammers may also use a wire transfer phishing attack. They will impersonate legitimate entities by sending fraudulent messages to a business or an individual's email account. They aim to trick targets into handing over bank account information or transferring money into their account.
Hackers use various methods to convince someone to transfer funds by wire. Note that wire transfers are immediate. Therefore, by the time someone realizes that they were victims of wire fraud, the funds have already left their accounts. This is why it’s essential to have wire transfer fraud prevention measures in place and to know what to do when it has already happened.
Can You Still Recover Funds From Wire Transfer Fraud?
Fraudsters find this crime appealing as it's almost impossible to trace. Once you transfer money by wire, a network of people immediately withdraw the money in cash. They may also transfer it to several bank accounts and convert it to cryptocurrency. Regardless of where you are in the world, you can do a wire transfer and have it stolen in a blink of an eye.
Since fraudsters are skilled in moving money in real time, detecting and tracking their schemes can be difficult. They may also use tactics to delay your course of action. In many cases, it may be too late for a victim of a fraudulent wire transfer to realize that their money was stolen.
Retrieving funds from wire transfer fraud can be challenging, but it's not entirely impossible. You can use the Financial Fraud Kill Chain (FFKC) to recover your lost money. It's a program initiated by the FBI and law enforcement partners to help victims of wire transfer fraud recover their funds.
However, the FFKC is only applicable to a fraudulent wire transfer if:
- The amount is $50,000 or higher
- The money is sent internationally
- There's an initiated SWIFT recall notice
- The incident was reported to the FBI within the last 72 hours
Note that you must report any wire fraud incident to law enforcement even if they don't meet such criteria. Whether you get a refund depends on what happened and how you respond to the situation.
How Can You Retrieve Funds from Wire Transfer Fraud?
Time is of the essence if you're a victim of wire transfer fraud and want to recover the stolen money. Below, we'll walk you through the steps you need to take after wiring money to fraudsters. While they won't guarantee you'll recoup all the stolen funds, they can help maximize your chances of getting them back.
Gather all the pertinent details
It’s essential to gather all the pertinent details of the transaction. Record your conversations with the fraudsters while they're still fresh in your memory. The following is a list of information that may serve as helpful evidence for your case:
- Names, positions, or titles used by the fraudsters
- The contact information you used to reach out to them
- Printouts or screenshots of emails, web pages, and other online interactions
- Checks, receipts, statements, and further payment details of wire transfers
Inform your bank and initiate a SWIFT recall
It's possible to stop the transfer of funds if the transaction happened a few minutes or hours ago. Inform your bank as soon as you realize the wire transfer was fraudulent. Request a SWIFT recall notice and have your financial institution contact the receiving bank to freeze the fraudster's account.
The banks could help the authorities trace the money even if the funds were already moved. Note that all the information about the wire transfer is necessary to initiate the request.
File a complaint with your local FBI field office
Your local FBI field office can help stop the money transfer through the FFKC. However, to start the process, you must first file a complaint with the FBI's IC3. Once the report is filed, they will give you an IC3 complaint number. This step is necessary, but it doesn’t guarantee real-time assistance or recovery effort.
Evaluate third-party actions
Generally, many parties are involved in wire transfer fraud. For example, the tile company, seller, buyer, or real estate agent are some of the participants in real estate transactions.
The third-party actions or omissions may cause a cybersecurity breach, letting hackers gain unauthorized access and initiate wire fraud schemes. In cases like this, the responsible party can be held liable.
Examine your insurance coverage
Depending on your insurance coverage, you may be able to seek compensation for the losses from a wire transfer fraud. However, like any other claim, the insurance company will do everything to avoid paying you, especially when it's a huge loss.
You'll need to make a good case so that the insurer approves your request for compensation. This is particularly true if your claim doesn't have sufficient evidence.
Reach out to an attorney quickly
Filing a police report for wire transfer fraud isn't enough. You need an experienced lawyer to help you with the process of recovery. They can better assist you in what actions to take to reduce your losses.
They're also knowledgeable about who you should notify about the incident and how to prevent it in the future.
If you have insurance coverage for wire fraud losses, you'll likely need an attorney's expertise to get the compensation you need. Therefore, make sure you speak to an attorney as soon as possible.
Protect Yourself Against Fraudulent Wire Transfer
Taking the proper actions after sending your money to fraudsters is necessary. However, there's no assurance that you'll get the money back. Prevention is still the best way to ensure you don't lose substantial amounts of money to wire transfer fraud. Protect yourself by implementing cybersecurity measures and investing in safe transfer tools.
