Wire Fraud Protection
Reducing the Risk of Wire Transfer Fraud
Wire transfer fraud is on the rise with fraudsters targeting unsuspecting businesses with increasingly sophisticated email phishing scams. Fortunately, you can reduce the risk to your business by adopting some easy–to–follow procedures.
What you need to know
Incidents of wire fraud nearly doubled from 14% in 2013 to 27% in 20141, according to the Association for Financial Professionals. A common scam involves fraudsters attempting to defraud businesses by impersonating business executives, partners, or representatives of trusted vendors through email. This is how the scam works:
- A fraudster gains access to the email account of a business executive through social media or some other means, or creates an email account slightly different from the executive's legitimate account – perhaps substituting a period for a dash or changing one letter.
- The fraudster then sends an email to an employee with payables responsibility requesting a wire transfer. To make the request sound legitimate, the fraudster may emulate the requestor's writing style or add information learned from a review of the requestor's email or social media account. The email requesting the wire transfer may convey a sense of urgency.
- The employee believes the request is legitimate and initiates the wire transfer with their bank. Since the request is from an authorized account signer, the bank processes the wire transfer. Because the requests are from authorized account signers, through Internet banking, or other legitimate wire request processes, the banks process the wire transfers and send funds to the fraudsters' bank accounts.
- A variation of this scam involves a fraudster impersonating a trusted vendor or a business partner with the authority to instruct the business' payables department. In these cases, the fraudster requests an outgoing wire transfer to pay an invoice or as advance payment for an upcoming order.
- If your business is a target of wire transfer fraud, immediately contact your Vectra Bank branch or call (800) 232-8948, Monday through Saturday, 7am to 7pm. After you notify us of a possible wire transfer fraud, we will attempt to recover the transferred funds. But, it is important to understand that your business is responsible for such frauds and you may suffer a loss. Funds transferred by wire are typically available for withdrawal as soon as they enter the recipient's account, and it is possible you won't recognize the fraud until the fraudster has withdrawn the funds. If Vectra Bank receives the wire transfer requests from a legitimate, authorized account signer, through Internet banking, or other legitimate wire request processes, the bank is not responsible for covering lost funds.
Simple procedures to help protect your business
Adopting some easy-to-follow procedures can protect your business from wire transfer scams:
- Communicate – Make sure your employees and co-workers, especially those responsible for initiating wire transfers, are aware of common email phishing and account takeover scams.
- Review – Train employees to closely inspect all emails requesting payments or changes to payment methods.
- Confirm – Ensure that all employees confirm payment requests received by email with the requestor in person or over the phone.
- Remind – Regularly remind your employees and co-workers of the ongoing risk of fraud, and ensure they are following procedures to limit your exposure.
Vectra Bank emails will never ask you for personal information or data, or any other sensitive information.
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