Top 9 Wire Transfer Scams (and How To Avoid Them)

Top 9 Wire Transfer Scams (and How To Avoid Them)

Wire transfer scams can wipe out your house deposit or savings in no time. Get the lowdown on how these scams operate, what warning signs to look for, and tips to protect yourself.

Getting Scammed While Wiring Money

When Aaron Fisher transferred more than $900,000 to a Wells Fargo account for the down payment on his dream house, he believed he was setting his family up for a bright future. Unfortunately, Aaron ended up in a nightmare, having sent his entire life savings to scammers through a sophisticated wire transfer scheme. The fraudsters used fake email addresses to take over an email conversation between Aaron and his real estate agent. They then sent him digital versions of the real closing documents and wire transfer instructions, but changed the destination of the money to their own account.

According to the FTC, Americans lost $343.7 million to wire transfer fraud in 2023, making it one of the top three fraud payment methods. The other two top fraud payment methods were bank transfers or payments ($1.8 billion) and cryptocurrency ($1.4 billion).

What Are Wire Transfer Scams?

A wire transfer scam happens when a fraudster pretends to be someone you trust, like a bank representative, co-worker, or even a family member, and tricks you into sending them money through electronic bank transfers.

Wire transfers are super quick and really hard to reverse, making them a go-to choice for scammers. By the time people catch on to the fact that they’ve been duped, the scammer has already vanished with their cash.

Here’s a typical scenario of how a wire transfer scam goes down:

• Scammers often send out phishing messages, insisting that payment be made through wire transfers. In other cases, they sneak into real conversations online and twist valid payment details.
• For instance, they might insert themselves into an email thread between homebuyers, lawyers, and title companies. Or they could pretend to be a company executive asking for a change in the wire transfer details for a big payment.
• Everything about the transfer seems legit, but the account info is off. The victim believes they’re sending money to the right place, but it’s actually going straight to the scammer.
• Since wire transfers happen so fast, the scammer gets the money almost immediately. Once the payment goes through, it’s nearly impossible to recover the stolen funds.

Can a Wire Transfer Be Reversed?

The quick answer: Not really.

When you do a domestic transfer between accounts at the same bank, it usually goes through within 24 hours. But thanks to digital banking, wire transfers can happen almost instantly now.

This speed is a double-edged sword, as scammers can grab the cash, shift it to another account, and disappear before the victims even realize they need to act. You can only reverse a wire transfer if your bank tells the receiving bank about your cancellation request before the transfer is processed.

Once the receiving bank accepts the money, there's no going back. For international wire transfers, there’s a tiny window of about 30 minutes where you might be able to recall the funds, but this only works in certain situations: - Your bank messed up the recipient's account number. The recipient got more money than you meant to send. - You accidentally sent the money twice. If the bank is at fault, they’re usually more willing to help you out. But if you made a mistake and approved the transfer from your device, chances are slim that you’ll be able to reverse it.

Here are 9 Latest Wire Transfer Scams (and How To Spot Them)

1. Real estate wire fraud Scams
2. Overpayments scams
3. Advance fee scams for bogus loans
4. “Processing fees” for phony lottery prizes
5. Fake check schemes
6. “Family emergency” scams
7. Rental scams for apartments and homes
8. Tech support scams
9. Business Email Compromise (BEC) scams.

1. Real estate wire fraud, (also known as mortgage wire fraud)

Real estate wire fraud is a serious issue that the Fisher family learned the hard way. Scammers can make off with huge sums of money in affluent areas like Beverly Hills or Manhattan with just one successful scheme. Once they gain access to your email, they can easily pose as your agent or lawyer.

Take Jenna Carlson, for example; she fell victim to a scam where someone pretended to be the paralegal from her realtor’s office. The email looked legit, so Jenna quickly wired $42,000 to secure her dream home. It wasn’t until the real paralegal reached out that Jenna realized she had been duped.

To avoid becoming a victim, keep these tips in mind:

• Meet with your real estate agent in person to go over the closing process.
• It’s smart to set up a password that only trusted people can use during phone calls.
• Stay alert for any last-minute changes.
• If you get an urgent email asking for a deposit, that’s a major warning sign.
• Always reach out to your attorney directly to verify wire transfer details.
• Your lender should be able to confirm the bank account info without any issues.

2. Overpayment scams

Overpayment scams on online marketplaces In this type of scam, phony buyers claim they accidentally sent you too much money through a wire transfer and ask you to send back the extra.

If you go along with it, they’ll cancel their original payment, leaving you with a loss. Cathy Whitaker put around 60 items up for sale on Facebook Marketplace in just two days, and offers started pouring into her DMs right away. However, when several potential buyers began requesting personal info, Cathy quickly figured out they weren’t legit.

Avoid getting scammed. Here’s what to do:

• Be cautious of buyers who offer more than your asking price or anyone who sends you extra cash right away.
• Double-check email addresses.
• Scammers often use slightly altered email addresses to make it seem like they’re from real companies.

Take your time. You should never feel pressured to make a wire transfer, especially from someone you don’t know. If something feels off, trust your gut.

3. Advance fee scams for bogus loans

In 2022, a couple from Virginia Beach was convicted for running a loan scam that tricked almost 1,700 homeowners. Ronald A. Smith and his wife promised help with loan applications in exchange for upfront fees, often paid through wire transfers. When folks are in need of cash for things like mortgage payments, car repairs, or credit card bills, scammers can easily entice them with offers of “guaranteed loans.”

To avoid getting scammed, keep these tips in mind:

• Steer clear of ads that promise credit no matter your credit history.
• If it seems too good to be true, it likely is.
• Don’t ever pay any fees upfront for a loan. Scammers might claim your loan is approved, but if they ask for payment for "insurance" or "processing," cut off all communication.

Hang up on robocalls right away. Those automated calls with pre-recorded pitches are illegal, and no legitimate lender would use that method to reach out to potential clients.

4. Processing fees for phony lottery prizes

Have you ever gotten an email or letter saying you won a lottery or sweepstakes prize — like a new car or all-expense-paid holiday? While most people know these offers are scams, others unwittingly get in touch with the sender — opening the door to fraudsters who try to steal money and financial details.

If you pay, you'll lose money and receive nothing. Worse still, you could also expose your personal information, making you a target for other scams or identity theft.

Don’t get scammed. Do this:

• Don’t share your financial information to “increase your odds of winning.”
• Real sweepstakes are free, so you should never have to give your credit card number at any point.
• Never pay to get a prize. If an email or phone call leads to a request for you to pay for a prize, it’s a scam.

End communications with callers if they persist and tell you that a payment is needed to cover taxes or shipping charges.

5. Fake check schemes

Fake check scams can take on various forms, but one recent twist involves job offers for remote positions. In this scenario, your "new boss" sends you a check to deposit and then asks you to wire a portion of that money back to them or someone they know.

A few days later, your bank will realize the check is bogus, leaving you responsible for the amount. Meanwhile, the scammer and your supposed job will vanish. It happened in May to Tammy Geyerman of Concord, who thought she had finally landed a work-at-home job.

"I was really excited. I told my father, I told my mother, hey, I got a job we'll have plenty of money we don't have to worry anymore." A person identifying himself as "Joseph Davis" emailed her saying he found her resume online and after an "interview" conducted over a texting platform, he gave her the supposed good news.

"He said, 'Oh yeah, we're gonna hire you.' I was like, 'Oh! OK, cool,''' Geyerman said. Her new boss needed her to buy a computer,

"He said what we're gonna do is my company is gonna send you a check for $1,900," Geyerman said. Sure enough, Geyerman received a $1,900 check and deposited it into her account at Patelco Credit Union. The money showed up in her account, and her balance more than doubled. Her supposed new boss told her to use it for that computer.

"And he tells me, 'OK, now I want you to put this person's name in your Zelle,'" Geyerman recalled, referring to the quick-pay app that links to her checking account. "... and send that person $900."

She sent $900 through Zelle, then bought another $1,000 in Visa gift cards, sending the images to her supposed new employer. .

"I knew immediately the money would be gone but OK, it's their money so I wasn't too worried about it,'' Geyerman said.

Geyerman thought the $1,900 she saw in her bank account would cover the cost. What she didn't realize was, the money wasn't really there.

The job was fake, the check was worthless. And Patelco took the $1,900 back out of her account, leaving her account $830 in the red. Patelco said she had to pay that back too, or it would close her account. "They said they were going to drain my account and I would be $830.06 in the hole. 'Oh, we're so sorry this happened to you and don't feel bad. It happens to dozens of people all day every day. It's not your fault,'" Geyerman said, recalling the response she got from Patelco. "But... now the bank was emptying my bank account. And I had nothing else to live on."

To avoid falling for this scam, remember:

• Never cash a check to send money via wire transfer, gift cards, or cryptocurrency to a "new employer" or anyone you don’t know well.
• If you come across any suspicious job offers that involve check deposits, report them to the U.S. Postal Inspection Service at 1-877-876-2455 or online at www.uspis.gov. Send any counterfeit checks you receive to the Federal Trade Commission (FTC) through reportfraud.ftc.gov.

6. Family emergency scams

In this heartfelt scam, you get a frantic call or text about a family member in a serious situation, like a car crash or a medical emergency. The person on the other end might pretend to be your loved one or an attorney claiming to represent them. Their aim is to freak you out enough to send them money for bail or urgent medical expenses.

This type of scam is a major tactic used against older adults. Back in November 2022, two individuals were sentenced in federal court for their role in a nationwide grandparent scam. They managed to swindle 70 elderly victims out of a total of $2 million, convincing many to wire money.

To avoid falling for this scam, here’s what you can do:

• Set up a secret passphrase that everyone in your family (or friends and colleagues) should use if they ever find themselves in a tough spot and need help or money.
• It’s best to discuss this in person and not share it through email, text, or social media.
• Don’t rush into action, even if the caller sounds upset.
• Ask them questions that only your family member would know the answers to.
• If you receive a call about someone in trouble, take a moment to check the story with others.
• If the caller insists you shouldn’t talk to anyone else, it’s likely a scam.

7. Rental scams for apartments and homes

The FBI issued a warning about the increasing threat of wire transfer scams targeting rental properties. Scammers create fake rental listings for real homes and include their contact info. When potential renters reach out, these crooks persuade them to send money before they even see the place.

A man from East Providence, RI, saw an online ad for an apartment in Cambridge, MA, which asked for the first and last month’s rent plus a security deposit. He was informed that he wouldn’t get the keys or be able to enter the apartment until his $6,000 check cleared. Once it did, he set up a time to pick up the keys, but when he showed up, nobody answered the door. After trying to reach the supposed owner through calls and texts, he got a message back saying, “you got scammed, don’t text this number again.”

To avoid falling victim to these scams:

• Keep these tips in mind: Don’t send any money for a rental until you’ve seen the property and met the owner or real estate agent face-to-face.
• Do your homework on the owner and agent by checking public records related to the property and any associated companies.
• A simple Google search of the address can reveal if it’s actually for sale or listed elsewhere.
• Be cautious of landlords who say they’re out of town and ask you to wire money to a foreign account in advance. This is usually a red flag for a scam.

9. Tech support scams

Tech support scams are a real hassle. Scammers often reach out through cold calls or texts, pretending to be from well-known tech companies like Microsoft. They’ll claim there’s a problem with your computer and try to get you to pay them to fix it. These crooks usually go after people who might not be very tech-savvy,

Cybercriminals are using AI-driven scams, impersonating Apple and Microsoft tech support to deceive users through phishing emails and malvertising. Hackers often use sneaky tricks, like pop-up alerts or phishing emails, to freak users out into thinking their devices are infected with malware. These alerts usually urge users to call a fake support number, where scammers manipulate them into sharing personal info. The scammers take advantage of the strong reputations of brands like Apple and Microsoft to seem trustworthy. As Cliff Steinhauer, the Director of Information Security at the National Cybersecurity Alliance, mentioned in a CNBC interview, “Who doesn’t know Microsoft or Apple as a brand?” This strategy allows scammers to exploit users' trust in these companies, making their scams look more believable.

Malvertising: A Rising Danger

Malvertising is becoming a more common scam method. Cybercriminals buy ads on search engines like Google or Bing, making them look like sponsored content when you search for something. For example, if someone types in “Microsoft support,” they might see a fake ad with a bogus support number.

If they call that number, they end up talking to scammers pretending to be real tech support agents. How to Keep Yourself Safe If you think you’ve been scammed, it’s super important to act fast. Start by changing the username and password for any accounts you shared during the scam. Reach out to your bank right away to report any strange activity and let the police know too.

To avoid getting scammed, keep these tips in mind:

• Real tech companies won’t reach out to you out of the blue about issues with your computer.
• If you get an unexpected call or email, it’s likely a scam.
• Don’t pay attention to pop-up warnings that say you have security problems and tell you to call a number.
• If you see these pop-ups, run a malware scan to check if your computer has been compromised.
• Always reach out to trusted software companies directly through their official websites or phone numbers if you have any computer issues.
• To avoid getting scammed in the future, make sure your device has solid antivirus software and be careful about clicking on links in emails or ads. By staying vigilant and informed about these tricks, people can better shield themselves from falling prey to tech support scams.

9. Business Email Compromise (BEC) scams.

Business Email Compromise (BEC) is a type of phishing scam where fraudsters deceive employees into revealing sensitive information or transferring money to fake accounts. They often pose as someone trustworthy, like the CEO, creating a sense of urgency and authority to push victims into making hasty decisions.

In August 2022, three men from Nigeria were charged for their involvement in a BEC scheme that swindled over $5 million from unsuspecting victims. They pretended to be a construction company, setting up a fake website and email addresses to trick universities into wiring funds.

To avoid falling victim to these scams, consider these steps:

• Require physical signatures to verify bank account details before any wire transfers are approved.
• Make it a rule that employees must have a verbal conversation before sending any email requests for wire transfers.
• No payments should be processed without confirming the transaction in person or over the phone.
• Ask your bank to reach out to you for confirmation before they process any transactions.

Did You Wire Money to a Scammer? Do this Now!

If you think you’ve been scammed through a wire transfer, don’t wait around. Here’s what you can do to try and recover your money or at least minimize the fallout:

1. Get in touch with your bank or wire transfer service right away. Let them know you’ve been scammed and ask them to initiate a recall of the transaction. They’ll need all the details about the transfer to get started.
2. Request your bank to reach out to the bank that received the funds. The fraud department at the recipient bank might be able to freeze the money in that account. If the scammers have already withdrawn it, your bank can help trace where it went. Keep track of all the banks involved and ask each one to freeze the funds if possible.
3. Report the scam to the Federal Trade Commission (FTC). The FTC can help you file an official report and offer support for recovering from fraud. You can submit your report online at reportfraud.ftc.gov, and you’ll need to provide some personal info like: - Your full name - Date of birth - Social Security Number (SSN) - Driver's license number - Current address and how long you’ve lived there - Phone number - Email address If you think the scammers have your personal info, you can also file an identity theft report at IdentityTheft.gov.
4. File a complaint with the FBI’s Internet Crime Complaint Center (IC3). You can assist in the investigation by providing details about the scam, including any emails, spam texts, or links to fake websites. The FBI will give you an IC3 Complaint Number for your records.
5. Reach out to your local police department or the nearest FBI field office. You can find your local FBI office online. Ask to talk to someone who handles financial or cybercrimes. When you report the scam, make sure to mention your IC3 Complaint Number and provide your contact details.