Making victim support a shared responsibility

An effective response to fraud must involve collaboration across internal teams. Anti-money laundering (AML), information technology, fraud prevention, and client service departments should operate under a unified plan to ensure quick and coordinated action. Regular training and updates on emerging fraud trends are essential.

Equally important is leadership support. Institutions that invest in fraud prevention tools, adequate staffing, and client education signal that fraud victim support is not a side function but a core priority.

Turning crisis into opportunity

Fraud response efforts should be viewed as risk mitigation and opportunities to lead with purpose. Financial institutions can demonstrate their commitment to ethical banking and social responsibility by standing with victims and guiding them through recovery. Banks and credit unions that take fraud victim support seriously will be better positioned to retain loyal clients, enhance their brand reputation, and serve as trusted pillars in their communities.

Understanding regulatory expectations

Financial institutions are expected to play a central role in identifying and reporting elder financial abuse. With AI-driven elder fraud rising, examiners and enforcement agencies may scrutinize how effectively institutions adapt to emerging typologies. The Financial Crimes Enforcement Network (FinCEN) has named fraud one of its national AML/CFT priorities, emphasizing the importance of proactive detection and reporting. Filing a suspicious activity report (SAR) is just one component; maintaining a culture of vigilance and continuous training is equally critical.

Institutions integrating fraud detection with anti-money laundering (AML) processes are better positioned to respond quickly to evolving threats. AI and machine learning can enhance monitoring by identifying unusual behavioral patterns that are common in modern fraud cases. While operational functions may remain separate, collaboration between fraud and AML teams is essential. Working in silos is no longer effective in detecting complex, AI-driven fraudulent activity.

Community education can prevent losses.

Technology is essential, but it is not the only solution. Many cases of AI-driven elder fraud can be avoided through targeted education and outreach. Consider hosting in-person fraud awareness sessions at senior centers, places of worship, or branch locations, where trusted staff can explain how fraudsters use AI to manipulate voices, images, and personal information. Partnering with local organizations or law enforcement can add credibility and help reach broader audiences. Institutions can also distribute printed guides or quick-reference tip sheets that walk through common scam scenarios, what to look out for, and how to respond. Posting short educational videos on your website or sharing alerts through account notifications and email campaigns reinforces these lessons and helps keep seniors informed between visits. A consistent focus on community education builds trust and positions your institution as a proactive ally in fraud prevention.

Practical tips to share with clients

Educating seniors with simple, actionable steps can go a long way in preventing AI-driven elder fraud. Consider sharing the following guidance during outreach efforts or in printed materials at branches:

• Confirm unexpected requests: If someone claims to be a relative in trouble or a representative from the bank, urge clients to hang up and call back using a known, trusted number, never the one provided in the message or call.
• Be cautious with links and urgent messages: Remind clients not to click on links, download attachments, or send money based on a single phone call, text, or video, even if the message appears to come from a loved one. AI tools can make fake messages seem personal and convincing.
• Enable account alerts: Encourage seniors to set up text or email alerts for large transactions or unusual activity. These real-time notifications can provide an early warning and allow for quick intervention.
• Review account activity regularly: Suggest checking account statements frequently or enrolling a trusted family member to help monitor for suspicious transactions.

Sharing these tips in clear, non-technical language can empower clients to act confidently and avoid becoming victims of increasingly sophisticated fraud attempts.

Protecting seniors in the age of AI

As fraud tactics evolve with AI, so must the strategies used to stop them. Financial institutions have a unique opportunity, and responsibility, to protect older clients through education, collaboration, and well-equipped fraud detection programs. By combining personal relationships with innovative technology and ongoing awareness efforts, banks and credit unions can serve as a first line of defense against AI-driven elder fraud. Staying informed and proactive today means safeguarding trust and financial well-being for the seniors who rely on you tomorrow.

Red flags for financially motivated sextortion

Financial institutions play a vital role in recognizing the transaction patterns associated with sextortion schemes. While many financial crimes share similar indicators, this typology has several distinctive hallmarks:

1. Unusual payment memos or notes

Many P2P platforms allow users to include a description or memo with a transaction. Sextortion-related payments have included phrases like:

• "delete video"
• "release"
• "for blackmailing"
• "please, I don't want to die"

Perpetrators may also instruct victims to use misleading memo lines such as "for tutoring" or "gift," which can be an attempt to bypass detection. Transactions with emotionally charged, unusual, or vague descriptors warrant scrutiny, especially from teen-linked accounts.

2. High-risk activity on teen accounts

Many platforms offer limited real-time parental controls even when teen accounts are sponsored by parents or guardians (as in Cash App or Venmo teen accounts). Watch for:

• Transactions outside of regular hours (late night or early morning)
• Multiple small transfers in quick succession
• New recipient accounts with no history of prior interaction
• Attempts to override parental settings or rapidly turn off alerts

3. Gift card purchases followed by digital redemption

Teens often purchase gift cards in-store and send codes to perpetrators via messaging apps. This physical-to-digital payment conversion is a hallmark of many scams, but its prevalence among teens makes it a critical red flag. Unusual spikes in gift card purchases by minors, particularly gaming or retail cards like Steam, Apple, or Amazon, could signal sextortion.

4. Rapid movement of funds internationally

Some sextortion proceeds are sent to international recipients, often via cryptocurrency or P2P transfers. Transactions originating in teen-linked accounts quickly converted to crypto or routed through Zelle or Cash App accounts linked to non-U.S. phone numbers or IP addresses may suggest laundering activity.

5. Behavioral anomalies

Accounts exhibiting sudden changes in behavior, such as an uptick in transaction volume or new connections to flagged geographies, should be evaluated. Financial institutions should leverage behavioral analytics to detect anomalies in teen accounts or parent-sponsored accounts.

What financial institutions can do

As TCOs become increasingly sophisticated in targeting teens for financially motivated sextortion, community banks and credit unions are uniquely positioned to serve as first-line defenders. Detecting and reporting this activity does not heighten the risk of a perpetrator releasing the explicit content; doing so would eliminate their leverage and attract greater law enforcement attention. For offenders, especially those engaged in crimes involving minors, the added exposure to child sexual abuse material charges significantly raises the stakes, making discretion far more beneficial than retaliation.

Here's financial institutions can make a difference:

1. Incorporate typology training

Financially motivated sextortion should be included as a specific typology in anti-money laundering/countering the financing of terrorism (AML/CFT) training programs. Front-line staff and compliance teams should understand how this scheme differs from traditional fraud.

2. Enhance transaction monitoring

Update rulesets in your fraud detection and AML software to flag:

• Memo lines with high-risk keywords
• Gift card purchase patterns by underage users
• Repeated small-value transactions from teen-linked accounts
• Transactions to or from known high-risk geographies

Advanced tools like Abrigo Fraud Detection can help automate these detections using pattern recognition and behavioral analytics.

3. Implement better parental controls

For institutions offering teen-linked accounts, ensure customers understand the controls available to limit P2P transfers or set spending thresholds. Partner with payment app providers to provide education on managing sponsored accounts and monitoring activity.

4. File timely SARs

When indicators of sextortion are identified, file suspicious activity reports (SARs) promptly with FinCEN, including specific payment memos, recipient information, and behavioral details. Highlight the potential involvement of a minor to prioritize law enforcement response.

5. Educate customers and communities

Banks and credit unions are trusted voices in their communities. Use that influence to educate parents and youth on digital safety, safe payment practices, and how to report suspicious activity. Include tips on verifying social media connections and keeping accounts private.

The NCMEC's "Take It Down" initiative and other programs offer resources to support victimized families and can be promoted through your institution's website, social channels, and newsletters.

Protecting the vulnerable, preventing tragedy

Financially motivated sextortion is more than a financial crime; it's a devastating form of child exploitation that often ends in emotional trauma or worse. The payment systems that power these crimes are the same systems financial institutions touch daily.

When banks and credit unions take proactive steps to detect and report red flags, they do more than stop fraud. They prevent abuse, disrupt transnational criminal networks, and they protect children in their communities from irreversible harm. Financial institutions can help stop this exploitation at its source by investing in education, transaction monitoring, and community outreach. It’s the right thing to do.

How financial institutions can help prevent real estate wire fraud

Financial institutions have both a responsibility and an opportunity to help protect clients by implementing strong fraud prevention practices.

1. Educate clients on what to expect

Financial institutions are in a unique position to proactively reduce wire fraud risk by equipping clients with clear expectations and practical safeguards early in the transaction process. Many homebuyers, particularly first-time buyers, are unfamiliar with how wire transfers work and may not understand just how vulnerable these transactions can be. Educating clients before the closing phase begins is one of the most effective ways to prevent fraud.

At the start of any real estate financing process, institutions should set the tone by providing clients with written guidance, ideally in both digital and printed formats, on how wire instructions will be communicated and verified. Clients should be told in plain terms:

• How wire instructions will be delivered: Reinforce that legitimate wire instructions will only be shared through secure, pre-established channels such as an encrypted portal or direct, in-person communication. If instructions arrive via email without prior notice or explanation, they should be treated as suspicious until confirmed.
• The importance of verification: Emphasize the need for verbal verification of wiring details by calling a known, previously validated phone number, not any number included in an email or document. Encourage clients to build a “safe contacts” list that includes their loan officer, title agent, and real estate agent’s direct lines.
• Warning signs to watch for: Help clients recognize red flags, including urgent requests to “act immediately,” changes to wire instructions shortly before closing, or emails with subtle misspellings in sender addresses or domain names. Clients should also be cautious of unexpected attachments or links claiming to confirm wire details.

Financial institutions can go a step further by offering fraud-prevention checklists or optional workshops for buyers. Some lenders even include a "Wire Fraud Acknowledgment Form" that borrowers sign to confirm they understand the risks and procedures. These added layers of education not only protect the client but also help establish the institution as a trusted advisor invested in the borrower’s financial well-being.

By demystifying the wire process and arming clients with actionable knowledge, financial institutions create a first line of defense against one of the fastest-growing fraud threats in the real estate market.

2. Enable transaction monitoring and red flags

Financial institutions can strengthen their fraud prevention efforts by configuring systems to detect suspicious behavior in real time. Modern fraud detection tools, such as Abrigo Fraud Detection, allow institutions to go beyond static rules by layering real-time behavioral logic with threshold-based alerts. This approach helps compliance teams detect anomalies that often precede wire fraud attempts, particularly those involving real estate transactions.

Abrigo’s advisory team recommends tailoring alerts to focus on high-dollar outbound wire transfers, especially those sent to first-time recipients, recently added payees, or international accounts. These types of transfers are commonly targeted in real estate fraud due to their urgency and high value.

Institutions should actively monitor for the following key red flags:

• Wire transfer amounts just below internal reporting thresholds: Fraudsters often structure transfers to avoid triggering automated review or regulatory thresholds, such as amounts just under $10,000 or an institution’s internal limit for manual review.
• Last-minute changes to beneficiary details: Updates to account numbers, beneficiary names, or destination banks shortly before disbursement should prompt immediate verification. These changes are a hallmark of real estate wire fraud.
• Multiple outbound wires to the same account from different customers: This could indicate a mule account receiving fraudulent transfers. If detected, institutions should immediately investigate and consider freezing the recipient account.
• Newly added payees followed by rapid high-value transfers: If a customer adds a new wire recipient and initiates a large transfer within a short window, the transaction should be scrutinized, especially if this deviates from the customer’s typical behavior.
• Customer activity outside of normal banking patterns: Behavioral analytics can help detect unusual login times, access from new IP addresses or devices, and transactions that do not align with the customer’s historical activity.
• Customers rushing or expressing urgency without context: Staff should be trained to recognize when clients express uncharacteristic urgency or insist on bypassing verification protocols. These behaviors can signal external pressure from fraudsters.

Financial institutions should develop a comprehensive monitoring framework that adapts to new fraud patterns over time. This proactive approach not only reduces the risk of real estate wire fraud losses but also demonstrates the institution’s commitment to safeguarding its clients' most important financial transactions.

3. Implement secure communication channels

Encourage the use of encrypted portals or multi-factor authentication to share sensitive transaction details. Many real estate firms and title companies now utilize secure platforms for this purpose. Institutions can lead by example and educate their clients to do the same.

4. Cross-train staff and update procedures

Banks and credit unions should ensure that frontline staff and wire room personnel receive ongoing training on fraud trends. Empower them to escalate suspicious transactions without penalty or fear of delaying a deal. Ongoing education can reinforce processes for holding or recalling funds when fraud is suspected.

5. Partner with law enforcement and fraud networks

Financial institutions should maintain a relationship with their regional FBI office or other law enforcement partners. Institutions that act quickly, usually within 72 hours, can sometimes recover or block funds from being fully transferred.

Staying ahead of evolving fraud

Real estate wire fraud continues to evolve, but financial institutions can mitigate risk with a proactive, layered strategy. Combining education, technology, and partnerships gives institutions the best chance to detect and stop fraud before clients suffer losses.

By taking these steps, financial institutions not only protect their customers' financial futures but also reinforce their reputation as trusted advisors. When it comes to real estate wire fraud, staying vigilant is not just smart; it is essential to delivering safe and successful transactions.