| Roy L. Kaufmann

Protect Yourself Against Wire Transfer and Credit Card Fraud

We are seeing two varieties of online fraud, but the good news is securing your information is as easy as a few steps.

The first type of fraud involves fake wiring instructions.

The criminal learns that a transaction is about to occur and sends an email to a title company, bank, buyer, seller, or real estate agent saying that the wiring instructions have changed. The email looks legitimate because the criminal has faked the from address. The email can look like it came from a trusted person whom the recipient knows. The criminal then falsifies the address for the transfer, which is easy to do. The recipient does not double-check the instructions and sends the money to the criminal’s account, usually in another country.

Once an individual sends the money, it is very difficult to recover the funds and speed is of the essence. After 72 hours, most hope is lost – as is the money. Banks can be powerless in assisting in their clients.

How to protect yourself:

  • Do not email wiring instructions or follow instructions emailed to you. Check and double-check the accuracy of the wiring instructions and communicate with the intended recipient or someone you trust at the title company or bank, by telephone.
  • Actively look for scammers. Do not accept any changes to wiring instructions by email. The scammer could send you an email that looks like it is from the title company or bank asking you to send the money to a different account. This could be fake. Call the title company yourself and go over the wiring instructions carefully. There have been cases where the scammer wrote to a real estate agent, who then directed the buyer to send money to the wrong account. Do not trust anyone.
  • Within hours of wiring the money, verify whether the recipient received your wire. If you wait days, you are probably out of luck.

If you become a victim, you must act immediately by following these steps:

  1. Call your bank immediately and
    1. Tell them to issue a SWIFT recall notice
    2. If the wire transfer meets the following criteria, tell your bank to contact the FBI to initiate a Financial Fraud Kill Chain. The FBI Kill Chain is only available if:
      • The wire is $50,000 or more;
      • The wire was international;
      • A SWIFT recall notice has been initiated; and
      • No more than 72 hours has gone by after the wire was erroneously sent

If the bank representative does not know what a FBI Kill Chain is, push until you get a supervisor who does know. The clock is ticking.

  1. Call your local police
  2. Call the FBI yourself. Do not stop at asking your bank to call the FBI.
  3. Report the crime at the FBI’s Internet Crime Complaint Center’s website.

The second involves scammers opening credit cards and obtain loans via impersonation.

The ease with which this can be done online is surprising. The scammer creates an email account with their target’s name, such as MarySmith@hotmail.com. The bank believes that the scammer is Mary, lends the money to the scammer, and then tries to collect money from the actual Mary. Besides the disruption to Mary’s life, her credit history takes a hit and it is difficult to correct it.

How to protect yourself:

  • Ask for credit freezes. There are three credit-reporting agencies. Lenders generally ask those agencies for a credit report before lending money. If you freeze your accounts, the credit agencies will not reply to the lender and the lender will not make the loan. It is the simplest method available to thwart credit fraud, and it’s free.
  • Important notes:

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