While wiring money is among the fastest ways to transfer funds, it's also among the easiest ways for a criminal to scam a victim. For all intents and purposes, wiring money is like sending cash, and a sophisticated crook can pocket your money. To avoid wire transfer scams, use the services only when necessary and only to send money to people you know are trustworthy.
Wire Transfer Basics
You can wire money from transfer services online, via phone or through a company's office. You can pay with cash, a credit or debit card or a transfer from a bank account. Well-known money transfer services include Western Union and Moneygram. They charge a small user's fee, but the recipient should receive the funds within minutes.
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Desperate Family Member Scam
One common scam involves the safety of relatives. The criminal sends the target a message that a family member in another country is in a desperate situation and needs money wired at once. If you know your family member is safe at home, that's one thing, but perhaps you're not sure of his whereabouts. Verify any information with your family. If you think there's any possible truth to the story, contact the U.S. Embassy in the country in which your relative supposedly is stuck.
Other Common Scams
Another common scam involves a check overpayment. Someone buys an item you have for sale and sends a check for more than the amount due. You're told to deposit the check and send a wire transfer to the buyer for the overpayment. However, the check isn't real, and you're still responsible for the wire transfer. You also might lose your merchandise if you've already sent it. A related scam involves bidding on Internet items. The con artist sets up a phony account and tells the winning bidder that only wire transfer payments are acceptable. While the scam specifics vary, the victim ends up out of his money.
You should raise a red flag whenever someone asks you to deposit a check in your account, and then immediately wire all or part of the sum to a third party. These cashier's checks are often sophisticated fakes, which the bank might initially accept. If it turns out to be fraud, you're responsible for the entire amount. The Federal Trade Commission website states that Internet transactions limited to wire transfer payments are probable scams. The FTC advises you insist on another payment method. "No matter what story the seller tells you, insisting on a money transfer is a signal that you won't get the item — or your money back," according to the FTC.
If you've been the victim of a wire transfer scam, report it to the company involved with money transfer immediately. You must file a formal complaint, and can also request the company reverse the transfer. The Federal Trade Commission notes that a transaction reversal is unlikely, but you must request it from the company. Once you deposit a check and withdraw funds, you are taking responsibility for any funds spent if the check turns out to be phony. You should also file a complaint online with the Federal Trade Commission at ftccomplaintassistant.gov. and contact your state Attorney General's office.
- Federal Deposit Insurance Corporation: Don't Get Taken by Wire Transfer Scams
- Washington State Office of the Attorney General: Wire Transfer Scams Take Many Forms
- Western Union: Fraud Types
- Federal Trade Commission: Using Money Transfer Services
- Federal Trade Commission: FTC Complaint Assistant
- Western Union: Send Money
- First National Denver: Avoid Costly Scams Involving Fake Checks and Money Orders