Making payments by wire transfers poses several risks, including fraud, teller mistakes and malware. When sending funds via wire transfer, usually once the funds are sent they cannot be recovered. That's why it's important to exercise extra caution before completing the transfer.
Difficult to Undo
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Sending money via wire transfer has similar risks to paying someone in cash, and if a problem is discovered later it's usually too late to get your money back. Wire transfers are a payment method frequently requested by scammers for that reason. To better protect yourself, never send a wire transfer to someone you don't trust.
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Fraudulent Activities
Scammers will go to great lengths to convince you to wire them funds. Common scams involve check cashing, estates and lottery winnings.
A common approach occurs when a third party pays you by check, but sends an amount greater than the agreed-upon purchase price. The individual then requests that you wire him the difference. If that original check is a fake, you may not discover that it has bounced until after you've wired the funds away, leaving you with a bad check and the lost cash from the transfer.
Scammers often add urgency to their request. If you're being pressured into making a hasty decision involving a wire transfer, chances are it's a scam.
If a deal seems too good to be true, it usually is. Scammers often come up with elaborate stories to help part you with your cash. Common scams include a request to send funds to secure lottery winnings, or a request for payments for work-at-home offers.
Data Mistakes
When you request a wire transfer through your bank, the banking representative must complete the process. Mistakes can occur if the banking representative mistypes the wire transfer amount, or if the destination number is entered incorrectly and the money winds up in the wrong account. The bank representative will confirm the transfer information with you before sending. Check it carefully to confirm everything is correct.
Malware and Virues
Much like online banking, wire transfers are susceptible to malware when you initiate them online. Malware, spyware and viruses can all infect your computer, permitting fraudsters to gain access to your online bank account and request a wire transfer on your behalf. By using a program that logs your keystrokes, a sophisticated hacker can overcome identification procedures the bank has in place and access your account to siphon money elsewhere.
To protect yourself, regularly update your computer's anti-viruses software. You should only log into your bank account from a secure computer. As an added level of protection, your bank may freeze your account if it suspects fraudulent activity.