Preventing Wire Fraud
What to Know Before you Wire Money
Scammers pressure you to wire money to them because it’s easy to take your money and disappear. Wiring money with services like MoneyGram, Ria, and Western Union is like sending cash — once you send it, you usually can’t get it back. Never wire money to anyone you haven’t met in person — no matter the reason they give.
Why Scammers Want you to Wire Money
If you need to send money to someone you know and trust, wiring money through companies like MoneyGram, Ria, and Western Union can be a useful way to get it there quickly. But scammers will try to get you to wire money to them, too. Why? Scammers know that once you wire money to them, there’s usually no way to get your money back. Scammers can quickly pick up your money at any of the wire transfer company’s locations throughout the world. And, it’s nearly impossible to identify who picked up the money or track them down. Scammers also know you won’t have the same protections you get by paying with a credit card. Report anyone who asks you to pay this way.
Why Wire Transfers are Difficult to Recall
Wire transfers are difficult to recall from thieves because they are designed to be immediate, irreversible, and final upon receipt. Once funds settle, often within minutes or hours, they are considered the recipient’s property. Thieves quickly move, withdraw, or convert these funds, making recovery nearly impossible.
Key Reasons for Difficulty in Reversing Wire Transfers
- Finality of Law: Under UCC Article 4A, wire transfers are legally final when the recipient bank accepts the funds, making cancellation legally complex without the thief’s consent.
- Speed of Transactions: Wire transfers move funds almost instantly, often clearing before the customer realizes the fraud and notifies the bank.
- Immediate Movement of Funds: Fraudsters immediately transfer stolen money to different accounts, often overseas, or convert it into cryptocurrency, bypassing standard banking recovery mechanisms.
- No Mandatory Reversal Mechanism: Unlike ACH transfers, which have built-in reversal procedures, wire transfers lack a mechanism for automated return.
- Need for Recipient Cooperation: A bank can only “request” a return, not force it, if the recipient (thief) has already moved the money.
How to Avoid a Money Wiring Scam
To protect yourself from money wiring scams:
- Never wire money through companies like MoneyGram, Ria, or Western Union to anyone you haven’t met in person. (That’s a scam: no matter what reason they give.)
- Don’t wire money to anyone who says they work at a government agency like the FTC, IRS, SSA, U.S. Customs and Border Protection, or a well-known company. (That’s a scam: the government will never ask you to send money this way.)
- Never wire money to anyone who pressures you into paying immediately.
- Don’t wire money to anyone who says a wire transfer is the only way to pay.
- Never wire money to someone who tries to sell you something over the phone. (It’s illegal for a telemarketer to ask you to pay with a wire transfer.)
How to Spot Common Wiring Scams
Here are some common ways scammers try to convince people to wire money.
Apartment and Vacation Rental Scams
You respond to an ad for an apartment or vacation rental with surprisingly low rent. When someone answers, they tell you to wire money through companies like MoneyGram, Ria, and Western Union — maybe for an application fee, security deposit, first month’s rent, or a vacation rental fee. But scammers often trick people by putting their own contact information on apartment or vacation rental ads and photos that they hijacked from someone else. After you wire the money, the person you sent the money to disappears and you find out that there is no apartment or vacation rental.
Fake Check Scams
Someone sends you a check and tells you to deposit it. They tell you to wire some or all of the money back to them — or to another person. Since the money appears in your bank account, you do it. But the check is fake. It can take weeks for the bank to figure it out, but when it does, the bank will want you to repay the money you withdrew.
Scammers make up lots of stories to try to convince you to deposit a check; and wire money:
- Scammers say you’ve won a prize and need to wire money back to cover taxes and fees.
- Scammers say you got a job you applied for and send you a check to buy supplies, but tell you to wire part of the money back to them or on to someone else.
- Scammers say the check is part of a mystery shopping assignment to evaluate a wire transfer service.
- Scammers use a check to overpay you for something you’re selling online, then ask you to wire back the extra money.
Family Emergency Scams
You get an unexpected and frantic call from someone saying they are a family member or close friend. They say they need money to get out of trouble and to wire money through companies like MoneyGram, Ria, or Western Union right away. Not so fast. Is there really an emergency? Is it really your friend or family calling or someone calling on their behalf? It could be a scammer. Scammers call and pretend to be someone you know and now they can use artificial intelligence technology like voice cloning to sound very real.
Prize Scams
Scammers behind fake prizes, sweepstakes, or lottery scams call, text, email, or send letters saying you’ve won money or a prize. There’s always some “reason” they say you have to wire money first like paying for shipping and handling, taxes, or a processing fee to get the prize, but real prizes are free, and this is a scam.
Romance Scams
Romance scammers create fake profiles on dating sites, apps, and social media. Once they connect with you, they work to build your trust and might even talk or message you several times a day. Eventually, they make up a story like saying they have an emergency or want to travel to visit you and ask you to send money, but there is no emergency or visit. They are not even the person they say they are, and they take your money.
Utility Scams
You get a call from someone claiming to be from your gas, water, or electric company. They say they will cut off your services unless you pay immediately by wiring money through companies like MoneyGram, Ria, or Western Union. These scammers want to scare you into sending money before you have time to confirm what they’re saying. Real utility companies do not do this. A quick call to the utility company using the number on your bill or the utility company’s website would tell you it is a scam.