Wire Transfers - Best Practices

By: Benjamin Jacob

In the wake of Silicon Valley Bank’s (SVB) historic collapse and amid the continued year over year growth of criminal cyber activity, it is a good time to review best practices for business wire transfers. As SVB collapsed, nearly $42 billion dollars was transferred out of the bank in just over 24 hours, triggering a wave of new account openings and a need to update wire instructions. This presented a ripe opportunity for cyber attackers to exploit confusion and chaos.

Wire transfers are a convenient and fast way to transfer money between individuals, businesses, and financial institutions. They allow for quick and secure transactions that can be processed within minutes or hours. However, wire transfer fraud has become increasingly common in recent years, which is why it’s essential to understand the basics of wire transfers and best practices to avoid fraudulent schemes.

What is a wire transfer?

A wire transfer is a transaction that allows you to transfer funds from one bank account to another electronically. The sender authorizes the transfer by providing their bank with the necessary information about the recipient’s bank account, including the name of the bank, the account number, and the routing number. The sender’s bank then transfers the funds to the recipient’s bank account.

Best practices to avoid fraudulent wire transfer schemes:

Wire transfer fraud involves criminals tricking victims into sending money through a wire transfer. Here are some best practices to follow to avoid being a victim of wire transfer fraud:

  1. New wire transfer information should never be accepted or adopted solely by email. Email accounts are increasingly easy to spoof or hack as business email compromise (BEC) schemes have become a go-to method for organized cyber criminals.
  2. Verify the recipient’s information: Before sending a wire transfer, verify that the recipient’s information is correct. Call the recipient to confirm the bank account information and routing number. Be aware that sophisticated hackers / cyber criminals frequently use “vishing” (voice phishing) schemes to impersonate individuals in accounting or finance on the phone to verify fraudulent wire transfers. Consider requesting a video conference call to confirm instructions especially if you and your team detect anything suspicious. In the event you must verify by phone, ensure you are calling a verified phone number associated with the company you’re calling.
  3. Be cautious of unexpected requests: Be wary of unexpected requests for wire transfers, especially if the request is urgent or comes from an unknown party.
  4. Keep your business and personal information secure: Do not share your personal or business’s information, including your bank account and routing numbers. Be vigilant keeping your sensitive information secure and periodically evaluating your security programming. Consider designating or hiring an employee responsible for developing, implementing, and updating your business’s cybersecurity protocols.
  5. Use a secure network: Make sure you are using a secure network when sending wire transfers. Do not send wire transfers over public Wi-Fi networks or unsecured networks.
  6. Monitor your accounts: Regularly check your bank accounts and credit card statements to ensure that there are no unauthorized transactions.
  7. Educate yourself: Learn about wire transfer fraud and the different tactics used by criminals to scam victims. Stay up-to-date with the latest news and information about wire transfer fraud.

As wire transfer fraud becomes increasingly common, it’s essential to implement best practices to avoid your business becoming a victim. It is critical that your company and all relevant personnel maintain standard procedures and undergo periodic training to stay current on new threats and scams. In the event you find yourself victim to a fraudulent wire transfer scam, contact the FBI immediately – the FBI has been successful in certain instances stopping fraudulent transfers reported within 72 hours of initiation of the wire.

Picture on the top is by Expect Best and is in the public domain.

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