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Bank wire fraud – How social engineering and technology perpetrate fraud losses

Elissa Brewer, CAMS
March 8, 2024
Read Time: 0 min

Bank wire fraud is growing and becoming more complex. 

Here are a few simple things you, as a financial crime professional, can do to slow it down.

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Bank wire fraud


Bank wire fraud has long plagued the financial industry. While wire transfers offer speed and efficiency, they have always carried inherent risks. Despite mitigation efforts, technological advancements have empowered criminals, posing new challenges in combating fraud. In 2024, we face sophisticated schemes exploiting both technology and social engineering to target unsuspecting customers. This discussion highlights recent trends in wire fraud and offers strategies to protect both clients and institutions. 

In 2023, reported fraud losses surged to over $10 billion, a 14% increase from 2022, despite a similar number of cases being reported at 2.6 million. Notably, the nature, targets, and methods of perpetuating fraud are evolving. Investment scams were #1, with over $4.6 billion in losses reported. While only some of the funds for investment scams were moved with wire transactions, an average of 4%-5% of those scams were done with wires in all age groups. Other popular fraud scams that use wire transactions include business email compromise, real estate transaction fraud, and romance scams. The total loss attributable to wire transactions was $344 million, as described in 42,729 reports to the FTC. Keep in mind these numbers are only what is reported. We know a lot of fraud is not reported due to a lack of knowledge on reporting and victims feeling shame for their loss. 

Bank wire transfer fraud

Current fraud trends

Current fraud trends highlight a shift in scam origins. While previously, fraud was local or regional, today, scammers leverage technology extensively. Reports from various government and news sources indicate the existence of organized groups, often in other countries, exploiting individuals, including victims of human trafficking, to defraud U.S. citizens. They employ technology and social engineering tactics, reaching victims through email, social media, and text messages. Using victim artificial intelligence (AI), they gather personal information from platforms like Facebook and Instagram to customize their schemes. Funds are then funneled abroad through wire transfers and cryptocurrency transactions, financing transnational criminal networks.


Tips for AML/CFT efforts

How to help prevent wire fraud

So, how do we, as financial institutions and concerned citizens, stop clients, businesses, friends, and family from becoming a victim?  

  1. Educate yourself about imposter scams and the methods used to gain your information. We can no longer rely on bad grammar in an email, a phone call, or a text message that looks like it comes from our bank or credit union’s fraud department, tech support, or billing emergency communication. All these events can be manipulated into a scam and used as a catalyst to make you a victim.
  2. Understand that scammers are professionals. There are no accidental targets. Fraudsters use the same sales and marketing techniques as legitimate businesses to research and target their victims. They make fake accounts and profiles and analyze people groups, current events, and regional characteristics to appear as legitimate as possible. Everything from a phony text message that is trying to confirm an address for a USPS delivery to a business email compromise that started as a request to send money on behalf of the CFO is all curated and targeted to their recipient. It only takes one employee clicking on a phishing email to introduce malware or ransomware that can create an entry point for the fraudster’s scheme.
  3. Create and follow your internal processes for communications and security. The best defense is a good offense. Financial institutions should implement tools and protocols like dual control, transaction monitoring software, call-back numbers, and internal tracking or reporting methods to confirm the validity of a wire transaction. It only takes one human error for the entire chain to break down and potentially cause a loss. Ensure all employees are familiar with the processes and protocols and that they follow them every time. 
  4. Spread the word. As a financial institution, you are responsible for educating your community and clients on financial patterns and bank wire fraud trends. A recent study by CertifIDon, noted real estate wire fraud identified 71% of consumers believe it is someone else’s responsibility to teach them about wire fraud. Financial literacy is key critical. 

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About the Author

Elissa Brewer, CAMS

Risk Management Consultant
Elissa Brewer is a Risk Management Consultant with Abrigo in the Advisory Services Group. She has over 18 years’ experience working in the financial institution and software industry. Prior to joining Abrigo, Elissa worked for multiple financial institutions and built their BSA/AML/CFT/OFAC, fraud, and risk management programs from the ground

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About Abrigo

Abrigo enables U.S. financial institutions to support their communities through technology that fights financial crime, grows loans and deposits, and optimizes risk. Abrigo's platform centralizes the institution's data, creates a digital user experience, ensures compliance, and delivers efficiency for scale and profitable growth.

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