Wire Transfer Scams

Wire transfers can be a convenient and secure method for sending money to family members and businesses you know and trust. However, it’s important to be aware that wire transfer scams can be a more common type of bank fraud.

According to the FTC (Federal Trade Commission), losses from wire transfer fraud rose 22% from 2022 to 2023, and they rang up to a whopping $12.5 billion. To avoid being part of that grim statistic, learn about common types of wire transfer scams to watch out for, plus what to do if you’re the victim of such a scam.

Common Types of Wire Transfer Scams

Fraudsters are always seeking new money transfer scams for their playbook, which is something important to be aware of whether you’re opening a checking account for the first time or are a long-time banking customer. These are some of the most common types of wire transfer scams to keep an eye out for:

Application Fee and Security Deposit Scams

If you see an ad advertising an apartment or vacation rental with surprisingly low rent, be cautious — especially if you can’t tour the unit beforehand. If these listings require a wire transfer for an application fee or security deposit before you ever see the property, they are likely scams. Once you wire the money, you may never hear from the supposed landlord or rental agent again.

Fake Check Scams: Prizes, Jobs, and Sales

A common type of wire transfer fraud comes in the form of a fake check. A scammer will send you a fake check for more money than they were supposed to, then ask you to wire them back the difference. After you send the money, you’ll find out the check was fake so it wound up bouncing, and you’ll be out whatever money you wired.

These scams can happen in several formats:

•   Buying and selling goods online: Be careful when selling something online. The buyer may send you more money than they were supposed to and ask for you to wire back the rest.

•   Getting a job: You might get a job via an online application and interview process, and the new employer will send you a fake check, asking you to purchase equipment and supplies and send a portion of the money back. The job doesn’t actually exist, however, and you’ll be out the cash. Similarly, some online “secret shopper” ads also involve fake check scams.

•   Winning a prize: If you receive a check for some kind of prize but are asked to wire money back to pay taxes or fees, that’s like a scam.

Recommended: ACH vs. Wire Transfers

Family and Romance Scams

Scammers often prey on your good nature. Some may pretend to be a friend or family member in an emergency and email or text you asking for you to wire them money; the email address or phone number will look similar to that of your actual loved one. They may even call and disguise their voice by saying they’re sick or injured. Always contact your relative separately, using the contact info you have, to verify the emergency before sending money.

Some people may also fall victim to online romance scams, a form of catfishing. Scammers will form an online relationship, sometimes putting weeks or months into the “relationship.” Eventually, they’ll ask their new romantic partner to wire them some money (say, for a plane ticket so they can visit). After they receive the money, they disappear.

Government and Utility Scams

Scammers may call or message you pretending to be a government agency, such as the Internal Revenue Service (IRS) or a utility company, saying you owe money — and if you don’t wire money immediately, you’ll be fined or imprisoned or your utilities will be shut off.

Government agencies and utility companies will never ask you to wire money. This is a scam.

Fake Sales

Be cautious when shopping online for cars, electronics, or other goods. If the seller requests that you wire money before you receive the product, it’s very likely a scam.

Red Flags to Watch Out For

Once you know how wire transfer scammers operate, it’s easier to spot them before you fall prey to their tactics. Here are some wire fraud red flags to watch out for:

•   Unexpected requests for money: If a government agency, family member, or anyone else contacts you out of the blue and insists that you wire money, this is typical of how scammers operate and is likely a ploy.

•   Return payment requests: If you receive a check and are asked to return some of the money via wire, that scenario usually has scam written all over it.

•   Overseas requests: Scams involving international wire transfers can be more common. Be cautious if you’re asked to wire money overseas.

•   Only payment option: If someone says a wire transfer is the only payment option, avoid the transaction. That kind of restrictiveness can indicate that someone is attempting to commit bank fraud.

•   Urgency: Scammers typically pressure you to pay immediately — before you have the chance to question the transaction, investigate anything that feels off, or check in with trusted advisors.

•   Grammar errors and typos: Messages from scammers often have misspellings and grammar errors. However, many scam outreaches have become increasingly sophisticated, so these issues are not always present.

Recommended: Wire Transfer Fees

Protecting Yourself Against Wire Transfer Fraud

The best way to protect yourself against wire transfer fraud can be quite simple: Never wire money to someone you don’t know personally.

Some other tips to protect yourself against wire transfers:

•   Contact the person on your own: If someone reaches out pretending to be a loved one, a company, or agency that requests a wire transfer from you, find their legitimate business number or contact info and contact them separately to confirm the communication.

•   Shop locally: Buying and selling online can open you up to all kinds of scams. When participating in person-to-person sales, meet up in person (in a public location) and don’t go alone.

•   Watch out for things that feel off: Be vigilant for email addresses that don’t look familiar, misspellings in text messages, and promises that seem too good to be true.

Recommended: How to Avoid Wire Transfer Fees

What to Do If You’re a Victim

If you believe you’re the victim of a wire transfer scam, you need to act fast. Unfortunately, in most cases, it’s impossible to reverse a wire transfer, but in select scenarios, you may be able to stop it. Here’s what to do if you get scammed with a wire transfer.

You generally have up to 30 minutes after initiating an international wire transfer to reverse it, as long as the recipient hasn’t collected it already. If you used a wire transfer company, call them immediately to see what can be done:

•   MoneyGram: 1-800-926-9400

•   Western Union: 1-800-448-1492

•   Ria (Walmart transfers): 1-855-355-2145

•   Ria (non-Walmart transfers): 1-877-443-1399, extension 1615

If you use your bank for the wire transfer, contact the financial institution — whether it’s an online bank, traditional bank, or credit union — as soon as possible.

Even if you can’t stop the transaction, there are steps you should take to safeguard your finances if you get scammed by a wire transfer:

1.    Contact your bank or credit union: It’s a good idea to freeze your bank accounts for the time being to halt any other potential fraud.

2.    File a report with the police: Contact your local police report and ask them to launch a fraud investigation.

3.    Report the scam to the FTC: The Federal Trade Commission requests that you report all types of bank fraud, including wire transfer scams, at ReportFraud.ftc.gov.

You can also follow helpful tips to recover after being scammed.

Legal and Banking Protections

Unfortunately, when you willingly transfer money via wire to a scammer, it may not be possible to remedy the situation, as noted above. While wire transfer scams are illegal, scammers may sometimes be able to pick up the money without being identified or tracked down when wire-transfer companies are used and possibly for bank transfers as well.

Banks and wire transfer companies may be able to help you stop your wire transfer if the recipient hasn’t yet claimed it, but more often than not, there isn’t a way to interrupt the process once you’ve sent the money.

That said, if the bank makes a mistake with the wire transfer when transferring money from one bank to another, say, the recipient receives more than you meant to send, or the wire transfer was duplicated (i.e., sent twice), you have some protections.

The Takeaway

Unfortunately, wire transfer scams are not uncommon and challenging to reverse. Only wire someone money if you know them personally, and make sure you’re familiar with common tactics to trick you out of your money. If something ever seems off, it probably is.

There are multiple ways to transfer and receive money. SoFi currently offers incoming and limited outgoing domestic wire transfers, and our bank accounts have plenty of other features that make managing and sending money easy.

Interested in opening an online bank account? When you sign up for a SoFi Checking and Savings account with direct deposit, you’ll get a competitive annual percentage yield (APY), pay zero account fees, and enjoy an array of rewards, such as access to the Allpoint Network of 55,000+ fee-free ATMs globally. Qualifying accounts can even access their paycheck up to two days early.

FAQ

How do wire transfer scams typically work?

Wire transfer scams can work in a number of ways. Scammers often send you a fake check (say, for more money than they are paying you for goods or services) and then ask you to wire them some money back. Other times, they’ll pose as a government agency or a loved one and make you feel like you need to wire them money urgently.

What are the warning signs of a wire transfer scam?

Warning signs of a wire transfer scam may include urgent requests, promises that are too good to be true, misspellings and typos in messaging, and an inflexibility on the other person’s part to consider another form of payment.

How can I protect myself from wire transfer fraud?

The best way to protect yourself from wire transfer fraud is simply to never wire someone money if you don’t know them personally and to take the time you need to verify the legitimacy of the recipient.

What should I do if I suspect I’m the victim of a wire transfer scam?

If you believe you’re the victim of a wire transfer scam, contact the wire transfer company or bank immediately. While they likely can’t reverse the transfer, there’s a small chance they can help, but you have to act fast. Beyond that, file a police report and a report with the FTC, and consider freezing your bank account temporarily to avoid further fraud.

Photo credit: iStock/Lordn

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