What constitutes wire transfer fraud and steps for prevention
Fraud losses are growing at an all-time high, keeping financial institutions and their clients on their toes. In fact, the Federal Bureau of Investigation's 2023 IC3 Report reveals that a record number of complaints were received in 2023 at 880,418, with potential losses exceeding $12.5 billion. These figures represent a 22% increase in losses compared to 2022.
However, most of the fraud instances reported by the FBI fall into the category of wire transfer fraud—one of the oldest forms of fraud faced by financial institutions. Wire fraud is loosely defined as a financial crime intentionally perpetrated through electronic communication, which includes traditional wire transfers and any other fraud using the Internet, phone calls, text, social media, and email.
Whether the fraudster steals money, property, or personal information, if they've used electronic means to lure their victims, it is considered wire fraud. According to a 2024 survey conducted by CertifID, one in every four consumers is targeted with suspicious communications.