Wire Transfer Fraud is one of the preferred methods criminals use for accessing your funds. It generally involves an attempt to defraud a financial institution or to unlawfully obtain money from a financial institution using misrepresentations or false pretenses. The fraudster commits the fraud with the aid of some form of electronic communication – such as a telephone or computer. Wire transfers typically involve larger sums of money and are an immediate form of payment; it is a fast and easy way to transmit money among businesses and individuals which is why it is so attractive to fraudsters. Once the fraudsters have obtained the money you authorized, it is very difficult to have the wire transfer reversed.
For that reason, it is important to increase employee awareness and take the necessary steps to reduce your risk of becoming a victim of Wire Transfer Fraud. Listed below from Morrison, Clark & Company CPAs are a few of their suggested best practices to help minimize the risk of fraud and increase employee awareness:
- Education is key! Understanding email scams and educating your employees is critical to protect your organization.
- Requests for changes, immediate action, or lack of availability by phone should be met with intense scrutiny. Don’t be pressured, slow down and follow your company process.
- ALWAYS verify the authenticity of each wire transfer request by implementing a two-step verification process. Call the person, using a number you have previously called – not one from the current wire transfer request – to verbally verify it.
- DO NOT email wiring instructions. Use regular mail, phone or fax instead.
- Scrutinize all email correspondence regarding wire funds: Who is requesting the money and why are they requesting money.
- Review your business insurance policy. Does it cover financial losses due to cybersecurity fraud?
WARNING: Before you begin any wire transfer, it is important to stop, review and confirm that the information and the situation is consistent with your company’s policies. And only then do you release the funds!
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