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Wire Transfer Scams Take Many Forms

U.S. consumers lose millions of dollars each year to fraudsters using wire transfers as part of their scams.

Western Union, Moneygram and similar businesses allow you to send money quickly. Their services are useful for transmitting funds to friends, relatives and others you know well. But cons frequently try to take advantage of victims by convincing them to wire money to a stranger, often someone in a foreign country.

The initial hook can take many forms. In every case, the scam ends the same way – you are asked to wire money. And once you do, it’s usualy gone for good.

The most important thing for consumers to remember is this: Never wire money to someone you haven't known for a long time.

Any of the following “red flags” should signal a scam:

  • You are asked to wire money.
  • You are sent a check in connection with a payment request. Cons often win their victims’ confidence by sending a fake check for more than the amount of purchase or to cover so-called processing fees, shipping costs or other expenses. It may be a cashier’s check, personal check or money order. They instruct the victim to cash the check or money order and send them a portion of the money by wire. Read more about fake check scams.
  • The contact indicates a confirmation code or money transfer control number (MTCN) is needed before your money can be withdrawn.This is a blatant lie. Once you wire money, it can be picked up immediately.
  • A caller or e-mail appears to originate from overseas.
  • The person communicates via TTY service. TTY is used by the hearing impaired. Cons prefer the service because it disguises thick accents and makes calls untraceable. Follow-up correspondence is by e-mail.

Types of Scams

  • Classified ad purchases – fake buyers: Swindlers browse online classifieds, auto sales journals and newspapers for potential victims. They contact those advertising cars, electronics or just about anything of value, pretending to be an interested buyer. Payment arrives as a counterfeit check – often for more than the sale price. You are instructed to wire the extra amount to a third party or reimburse the difference. Typically, cons claim the wired money is payment for an intermediary to ship the item. Other times, they may send a check for the correct amount, then back out of the deal and ask for a refund.
    • How to protect yourself: Deal with local buyers. Only accept payment for the actual purchase price. When possible, accept only cash. If you accept a check, ask for one drawn on a local bank that you can visit to determine conclusively that the check is good. Don’t relinquish your car or other valuables until the issuing bank (the one listed on the check) has verified that the check has cleared.
  • Classified ad purchases – fake sellers: Cons post bogus advertisements for cars or other high-ticket items then ask for payment via wire transfer. Other times, they may suggest use of a phony escrow company.
    • How to protect yourself: Deal with local sellers. Question any seller who insists on using a particular form of payment and refuse requests to wire money.
  • Fake lotteries and sweepstakes: You receive a certificate indicating you’ve won a big prize and a check. You’re told to keep some of the money and send a wire transfer to cover a “processing fee” or vague taxes. Once the money is wired, the victim never sees their prize. You can’t legally play a foreign lottery in the United States, so those pitches are always scams.
    • How to protect yourself: Never pay or send money to anyone who claims you won a prize.
  • "Relatives" in need of help: You receive a desperate phone call, e-mail or even an instant message from someone posing as a grandchild or a friend. He was arrested overseas. She was mugged. Please send money right away. Except it’s not who you think – it’s a con artist.
    • How to protect yourself: Call the friend or relative claiming to need your help to confirm whether the story is true, using a phone number you know to be genuine. If you aren’t able to contact the person, call other friends or family members to confirm the situation. Refuse to send money via wire transfer.
  • Expensive food orders: The scammer (or possibly a ring of cons) uses a stolen credit card to pay for a wedding cake or large catering order then instructs the business to wire money to a company that will pick up and delivery the food.
  • Advance-fee loans: After submitting a loan application, you are asked to wire processing payments to a lender. Once you wire the money, you never receive the loan. In addition, the crooks have your bank account information and may rob your account.
    • How to protect yourself: Don’t pay for the promise of mere loan or credit approval. Legitimate lenders may charge application, appraisal, or credit report fees, but these are paid after the loan is approved and generally are paid out of the proceeds of the loan.
  • Secret shopper jobs: After responding to a “help wanted” ad to work as secret shopper, your first assignment is to wire money. You are sent a phony check with instructions to keep some for payment for your work and wire the rest.
    • How to protect yourself: Never accept a mystery shopping job that requires a wire transfer or one that requires that you pay money or use your own bank account. Also be skeptical of mystery shopping promoters who guarantee a job, charge a fee, sell directories of companies that provide mystery shoppers, or advertise in a “help wanted” section or by e-mail. Find information about legitimate companies on the Mystery Shopping Provider’s Association Web site at www.mysteryshop.org.
  • Work at home schemes: Consumers are offered part-time jobs as “international relayers.” Their task is to deposit checks into their personal bank accounts, keep a small percentage as a commission, and relay the rest by wire transfer to their new employer. The checks are often worthless. Other times, they are written by victims who purchased merchandise from an online auction but never got the goods. These same thieves, now armed with your banking information, can use the numbers to create a demand draft to make an unauthorized debit from your account.
    • How to protect yourself: Avoid job listings that use the terms “money transfers,” “wiring funds,” and “foreign agent agreements.” Never forward or transfer money from any of your personal accounts on behalf of an employer. If a legitimate job requires you to make money transfers, the money should be withdrawn from the employer’s business account. Never provide your bank account information until you are hired, and then only to a legitimate employer if you choose to have your paycheck deposited electronically.
  • “Nigerian” fund-transfer scams: Claiming to be Nigerian officials, businesspeople or the survivors of former royalty, scam artists offer to transfer millions of dollars into your bank account in exchange for a fee. Other times, they offer to let you keep a portion of the money or donate it to the charity of your choice. If you fall for the initial pitch, you may be asked to provide your bank account numbers. You’ll also be asked to send some money to cover transfer costs and attorney’s fees. In the end, you get nothing. Meanwhile, the con has vanished with your money and personal information that may be used to steal your identity.
    • How to protect yourself: Never send money or personal information to a stranger. Ask yourself, “Why would this person want to trust me with their money?” If something seems to good to be true, it usually is.

 

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