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How can companies protect themselves from wire transfer fraud?

Protecting Your Business from Wire Transfer Fraud

Wire transfer fraud has become a huge problem for businesses of all sizes. As more transactions move online, scammers have more opportunities to trick employees into sending money directly to them. According to the FBI, business email compromise scams alone have cost companies over $26 billion since 2016.
The good news is there are steps you can take to prevent your business from becoming the next victim. Here are some best practices to implement:

Educate Employees on Red Flags

The first line of defense is ensuring your employees understand what wire transfer scams look like. Go over these common red flags:
Requests come from outside normal procedures or reporting lines. For example, if the CEO typically approves wire transfers but now someone else is sending the request.
Requests involve secrecy or pressure. Scammers want to move quickly before getting caught.
Requests involve suspicious circumstances like payments to foreign suppliers that don’t match normal vendors.
Requests come from suspicious email addresses like misspellings of existing domains.
Requests direct payment to a personal account rather than a company account.
Make sure employees know not to ever send a wire transfer solely based on an email request. There should always be a secondary confirmation over the phone or in person.

Implement a Call-Back Process

Whenever a wire transfer request comes in, have a policy that the recipient must call back the requestor directly to confirm. Do not use any phone number provided on the actual request – look up the number independently. This verification call will allow any fraud to be detected.
You can take this a step further by establishing a secret verbal password that must be used to confirm wire transfers. This prevents a scammer from being able to confirm their own fake request.

Limit Access

Only employees who absolutely need access to initiate wire transfers should have it. The more people who can move money, the more potential vulnerabilities you have.
For executives like the CEO who are common wire transfer scam targets, flag their accounts to trigger extra scrutiny or verification procedures. You want to throw up roadblocks to fraudulent requests made under their names.

Set Limits

Putting limits on wire transfers can minimize potential losses from fraud. For example, require secondary approval from a manager for any transfer over $10,000. Or restrict international wire transfers which are common in scams.
You can even limit the window for sending wire transfers to business hours on weekdays. This prevents late night fraud when fewer employees are watching.

Use Whitelists

Maintain an approved list of recipient accounts where you will send wire transfers. Block any transfers to accounts not on this whitelist to prevent diversion of funds.
Be sure to keep this list updated as vendors change bank accounts. Don’t rely on info in old emails – reconfirm any changes verbally.

Watch for Sudden Changes

Beware if a known contact suddenly asks to change the bank account a wire transfer is sent to. Criminals will try to intercept legitimate transfers by getting the money rerouted.
Also watch for sudden requests to change amounts or recipients. Any last minute changes should be verified.

Christine Twomey
Christine Twomey
2024-03-21
Just had my Divorce case settled 2 months ago after having a horrible experience with another firm. I couldn’t be happier with Claire Banks and Elizabeth Garvey with their outstanding professionalism in doing so with Spodek Law Group. Any time I needed questions answered they were always prompt in doing so with all my uncertainties after 30 yrs of marriage.I feel from the bottom of my heart you will NOT be disappointed with either one. Thanks a million.
Brendan huisman
Brendan huisman
2024-03-18
Alex Zhik contacted me almost immediately when I reached out to Spodek for a consultation and was able to effectively communicate the path forward/consequences of my legal issue. I immediately agreed to hire Alex for his services and did not regret my choice. He was able to cover my case in court (with 1 day notice) and not only was he able to push my case down, he carefully negotiated a dismissal of the charge altogether. I highly recommend Spodek, and more specifically, Alex Zhik for all of your legal issues. Thanks guys!
Guerline Menard
Guerline Menard
2024-03-18
Thanks again Spodek law firm, particularly Esq Claire Banks who stood right there with us up to the finish line. Attached photos taken right outside of the court building and the smile on our faces represented victory, a breath of fresh air and satisfaction. We are very happy that this is over and we can move on with our lives. Thanks Spodek law 🙏🏼🙏🏼🙏🏼🙏🏼🙌🏼❤️
Keisha Parris
Keisha Parris
2024-03-15
Believe every single review here about Alex Z!! From our initial consultation, it was evident that Alex possessed a profound understanding of criminal law and a fierce dedication to his clients rights. Throughout the entirety of my case, Alex exhibited unparalleled professionalism and unwavering commitment. What sets Alex apart is not only his legal expertise but also his genuine compassion for his clients. He took the time to thoroughly explain my case, alleviating any concerns I had along the way. His exact words were “I’m not worried about it”. His unwavering support and guidance were invaluable throughout the entire process. I am immensely grateful for Alex's exceptional legal representation and wholeheartedly recommend his services to anyone in need of a skilled criminal defense attorney. Alex Z is not just a lawyer; he is a beacon of hope for those navigating the complexities of the legal system. If you find yourself in need of a dedicated and competent legal advocate, look no further than Alex Z.
Taïko Beauty
Taïko Beauty
2024-03-15
I don’t know where to start, I can write a novel about this firm, but one thing I will say is that having my best interest was their main priority since the beginning of my case which was back in Winter 2019. Miss Claire Banks, one of the best Attorneys in the firm represented me very well and was very professional, respectful, and truthful. Not once did she leave me in the dark, in fact she presented all options and routes that could possibly be considered for my case and she reinsured me that no matter what I decided to do, her and the team will have my back and that’s exactly what happened. Not only will I be liberated from this case, also, I will enjoy my freedom and continue to be a mother to my first born son and will have no restrictions with accomplishing my goals in life. Now that’s what I call victory!! I thank the Lord, My mother, Claire, and the Spodek team for standing by me and fighting with me. Words can’t describe how grateful I am to have the opportunity to work with this team. I’m very satisfied, very pleased with their performance, their hard work, and their diligence. Thank you team!
Anthony Williams
Anthony Williams
2024-03-12
Hey, how you guys doing? Good afternoon my name is Anthony Williams I just want to give a great shout out to the team of. Spodek law group. It is such a honor to use them and to use their assistance through this whole case from start to finish. They did everything that they said they was gonna do and if it ever comes down to it, if I ever have to use them again, hands-down they will be the first law office at the top of my list, thank you guys so much. It was a pleasure having you guys by my side so if you guys ever need them, do not hesitate to pick up the phone and give them a call.
Loveth Okpedo
Loveth Okpedo
2024-03-12
Very professional, very transparent, over all a great experience
Bee L
Bee L
2024-02-28
Amazing experience with Spodek! Very professional lawyers who take your case seriously. They treated me with respect, were always available, and answered any and all questions. They were able to help me very successfully and removed a huge stress. Highly recommend.
divesh patel
divesh patel
2024-02-24
I can't recommend Alex Zhik and Spodek Law Firm highly enough for their exceptional legal representation and personal mentorship. From the moment I engaged their services in October 2022, Alex took the time to understand my case thoroughly and provided guidance every step of the way. Alex's dedication to my case went above and beyond my expectations. His expertise, attention to detail, and commitment to achieving the best possible outcome were evident throughout the entire process. He took the time to mentor me, ensuring I understood the legal complexities involved to make informed decisions. Alex is the kind of guy you would want to have a beer with and has made a meaningful impact on me. I also want to acknowledge Todd Spodek, the leader of the firm, who played a crucial role in my case. His leadership and support bolstered the efforts of Alex, and his involvement highlighted the firm's commitment to excellence. Thanks to Alex Zhik and Todd Spodek, I achieved the outcome I desired, and I am incredibly grateful for their professionalism, expertise, and genuine care. If you're in need of legal representation, look no further than this outstanding team.

Confirm Delivery

Just because you sent a wire transfer does not mean it was properly received. Call the intended recipient using their real phone number on file to confirm they got the money.
If they report not receiving it, immediately investigate if it was intercepted. The faster you can spot fraud, the better chance you have of recovering funds.

Review Activity Regularly

Make auditing wire transfer activity part of your regular financial procedures. Look for any unusual patterns like spikes in amounts or frequent new recipients.
Anomalies may indicate someone inside has turned rogue and is embezzling funds through wire transfers. Catching it quickly limits losses.

Use Dual Controls

No single employee should have enough access to both initiate and authorize wire transfers. Separating these functions into multiple roles limits how much damage a rogue employee could do.
You can also require tokens or multi-factor authentication to approve wire transfers above a certain threshold. The more roadblocks, the better.

Watch Out for Phishing

Employees often unintentionally provide access to business accounts through phishing emails. Warn staff to watch for suspicious links and attachments requesting login info.
Enable two-factor authentication where possible to prevent criminals from accessing accounts even with login credentials in hand.

Secure Computers

Make sure all computers used for wire transfers have security protections enabled, like anti-virus software and firewalls. Keep all software updated to patch vulnerabilities.
Restrict access to wire activities to only specific workstations and keep them off any public Wi-Fi or shared networks. The fewer access points, the better.

Back Up Data

Maintain good backups of critical data like vendor and supplier records. If criminals do manage to get access, you want to be able to restore legitimate details and accounts.
Test backups regularly to verify you can recover data if needed. Backups are useless if they are corrupt or incomplete.

Beware of Social Engineering

The human element is the hardest to defend against. Criminals will try to trick or manipulate employees into initiating fraudulent wire transfers willingly.
Train staff to recognize common social engineering tactics like urgency, intimidation, and appealing to authority. Empower employees to push back on questionable requests.

Monitor Transactions

Leverage your bank’s transaction monitoring capabilities to spot suspicious wire transfers. Unusual activity patterns may indicate an account is compromised.
You can even consider services that actively monitor transactions and flag or stop wire transfers that match fraud characteristics. Though costs are involved, it may be worth it.

Insure Against Losses

Check if your business insurance policy covers losses due to wire transfer fraud. If not, consider adding this coverage to mitigate the financial impact if you do suffer a loss.
You may also be able to get insurance that specifically covers cyber crimes like fraudulent wire transfers initiated online. Shop around for the right fit.

Learn from Others

Use reported cases of wire transfer fraud at other companies to identify new risks. Criminals constantly shift their tactics and techniques.
Sign up for alerts from organizations like the FBI to stay on top of emerging trends in wire transfer scams targeting businesses. Knowledge is power.

Report Suspicious Activity

If you detect any suspicious wire transfer activity, document the details and immediately report it to your bank, regulators, and authorities.
Providing information on criminal tactics can help put measures in place to stop the next attempt on another company.

Act Quickly When Compromised

If a fraudulent wire transfer does occur, act swiftly to limit damage. Alert banks on both ends of the transaction, file a police report, contact regulators, and lock down affected accounts.
Freezing activity may allow more time for recovery. But the faster you can detect any breach, the better your chances.

Review Policies Regularly

Treat wire transfer security as an ongoing process, not a one-time fix. Review your policies frequently and look for opportunities to add new precautions.
As your business changes, you may need to update procedures around wire transfers to prevent new risks from developing. Adapt as needed.

Train Across the Company

Make wire transfer training part of onboarding all new hires. The more employees educated on the risks, the better protected the company will be.
Conduct refresher courses periodically to reinforce lessons learned. Complacency is an enemy of good security.

Learn from Mistakes

If fraud does occur, review what happened and look for ways to improve policies. Plug any gaps that allowed it to happen.
Turn mistakes into lessons that strengthen defenses for the future. Continual improvement is key.

In Summary…

With wire transfers a prime target, companies must make fraud prevention a priority. Take the time to implement controls, train employees, and adapt to new criminal tactics.
Ongoing vigilance in this area can save your business from becoming the next seven-figure wire transfer fraud statistic. Protect your bottom line.

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