Fraud Prevention - Wire Fraud

Wire Fraud

Wire Fraud refers to a type of crime that is committed through the use of technology and communication systems, including: telephones, computational systems, online networks, the Internet, or electronic databases. There have been increasing instances where individuals or companies fall victim to wire transfer scams perpetrated through fake emails, faxes or voice requests, often from people they think are senior executives of the company or legitimate vendors.

Examples include:

• Your company’s CEO or CFO sends you an urgent email request (from his email address) to wire transfer funds immediately. He says in the email that he “was about to get on a plane” or was “at a funeral” or he provides some other excuse indicating he would be out of touch for an extended period of time.
• You get an email from your regular outside vendor from their email address with a sudden change in wiring instructions to pay for an invoice.
• You get an email or fax request from your realtor or title company with a last-minute change in wiring instructions for closing a real estate deal.
• You get a fax on vendor letterhead with what appeared to be a legitimate signature with a different set of wiring instructions for a purchase your company was making.
• You get a phone call or voice mail from a legitimate vender with wiring instructions, where you did not recognize the voice.

What to do?

Establish a culture in your business or personal finances that encourages a questioning mindset. Where possible, utilize purchasing and treasury controls that require multiple approvals for wire transfers. But, most of all, NEVER trust email, fax or voice wire instructions without contacting the originator directly in order to validate that the instructions are correct.

Also, watch out for emails from your “boss” or “vendor” where the language is unfamiliar. Perhaps the style is more formal than he/she normally communicates. For instance, the use of the word “kindly” may not match the verbal style of the person sending the email. So, when the email says “kindly wire the funds” you should be suspicious. You should also be on the lookout for unusual colloquialisms. A fraudster may sign off on a hijacked email with “Cheers”. Unless your boss or vendor is from the UK or Australia, “Cheers” is not normal vocabulary for most Texas and Oklahoma residents.