Message from the Director – Wire Transfer Scams and Ways to Protect Yourself
The primary goal of the Office of the Comptroller of the Currency’s (OCC) Customer Assistance Group (CAG) is to process and resolve consumer complaints that fall under our jurisdiction. While CAG seeks to resolve complaints in an objective and expeditious manner, not all consumer issues are covered by banking laws or regulations and not all consumers will obtain the resolution they are seeking.
Consumers lose millions of dollars each year to fraudsters who use wire transfers as part of their scams. The initial contact can take on many forms and often the fraudster poses as someone you would normally trust, such as merchant, a business representative, a bank employee, a family member, or a friend of a friend. However, in every situation, the scam ends the same – the consumer is asked to wire money, either immediately or in a very short time window. In most cases, once the wire transfer is complete, the funds cannot be retrieved. As a consumer, you need to need to know how to identify a potential scam so you can spot fraud before becoming a victim. Here are a few examples of wire transfer scams:
- The Real Estate Purchase Scam: The fraudster hacks an email thread between the consumer and the consumer’s attorney or the title company. The fraudster then uses a spoofed email address to send the consumer closing documents and wire transfer instructions, with the scammers account information. The consumer follows the instructions provided in the email and funds are diverted to the fraudster’s account, rather than going to the attorney or title company.
- Family Emergency Scam: The consumer receives an urgent text or call from someone impersonating a family member or claiming to be an attorney representing a family member stating the family member has been arrested or has a medical emergency. The fraudster requests an immediate wire of funds to pay for bail or medical care.
- Home and Apartment Rental Scam: The fraudster posts a rental listing for an apartment or house and substitutes the contact details of the person actually listing the property with the fraudster’s information. When inquiries are received, the fraudster emphasizes the urgency of securing the property with an upfront wire transfer. When the renter arrives to take possession, they find out the property is not for rent.
- Tech Support Scam: A consumer receives a call or text from someone impersonating support staff from a reputable tech company such as Microsoft©. The fraudster claims there are issues with the consumer’s computer and requests remote access to fix the issue. The fraudster completes the alleged work and then requests payment for services. Through a series of payments from the consumer and refunds from the fraudster, the scammer convinces the consumer that they need to return the excess refund back to the fraudster via wire transfer. The consumer later determines that the alleged refund was actually a transfer of funds from their savings account to their checking account.
Here are some things you, as a consumer, can do to avoid wire transfer scams:
- Never respond instantly to a wire transfer request received via email or text.
- Beware of last minute changes. Before you send a large wire transfer, contact the requestor directly to verify the wire instructions and information.
- Choose a family member passphrase or code word to be used in emergency situations. The passphrase or code word should be discussed in person and not shared via text, email, or social media messaging apps.
- Do not wire funds for a rental until you visit the property and meet the owner or real estate agent in person. You may also want to verify ownership through public records searches.
- Ignore pop-up warnings that alert you to security issues and instruct you to call a phone number. Instead run a scan for malware and contact the software company directly via the information on their website.
For more information on various scams, the OCC recommends that consumers visit the following websites:
- Don't Get Taken by Wire Transfer Scams (fdic.gov)
- Before You Wire Money (ftc.gov)
- Wire Transfer Scams (atg.wa.gov)
- Fraud and scams | Consumer Financial Protection Bureau (consumerfinance.gov)
Wire transactions are covered under Section 4A of the Uniform Commercial Code and to some limited extent by the Electronic Funds Transfer Act, as implemented by Regulation E. Under the UCC, there are very few reasons that a sending bank may recall an authorized wire transfer, even in cases of fraud. Therefore, it is suggested that you verify funds are being sent to the correct account before finalizing the wire transfer.