How to Verify Wire Instructions and Prevent Fraud

Wire transfers offer a swift method for moving funds electronically between financial institutions. This convenience extends to both domestic and international payments, making them widely used for various purposes, including real estate closings, business acquisitions, and vendor payments. However, the speed and finality of wire transfers also make them a frequent target for financial fraud, including business email compromise (BEC) and social engineering schemes. Given the rising prevalence of these fraudulent activities, verifying wire instructions before initiating any transfer is an important safeguard against financial loss.

Identifying Legitimate Wire Information

Before initiating a wire transfer, understanding the essential components of legitimate wire instructions is important. For domestic transfers within the United States, necessary details include the recipient’s full legal name, their bank’s name and address, the account number, and the nine-digit ABA routing number. For international wire transfers, additional information such as the SWIFT/BIC code, a unique identifier for the recipient’s bank, and sometimes an International Bank Account Number (IBAN) are typically required.

Discrepancies within the received instructions can serve as early warning signs of potential fraud. Red flags often include sudden, unexpected changes to previously established wire instructions, especially if communicated via email. Poor grammar, misspellings, or unusual phrasing in the communication accompanying the instructions can indicate fraud. Requests originating from public domain email addresses (like @gmail.com) or from messaging apps not typically used for official business should prompt heightened scrutiny. Any unusual urgency or pressure to act quickly, or a threat of negative consequences for failing to send payment immediately, are common tactics employed by fraudsters.

Implementing Verification Protocols

Once wire instructions are received, implementing strong verification protocols is a primary defense against fraud. The most effective method involves direct, independent verification of the instructions. This requires contacting the intended recipient through a pre-existing, known phone number, rather than any contact information provided in the recent request. A verbal confirmation of all wire details, including the recipient’s name, bank name, account number, and routing or SWIFT code, helps ensure accuracy and authenticity.

Secure communication channels should be prioritized for exchanging sensitive wire information. If wire instructions are received via email, responding to that email or using any phone numbers or links embedded within it should be avoided. Instead, use a phone number that has been independently verified or is already on file from previous, legitimate interactions. This prevents fraudsters from intercepting communications via compromised or spoofed email accounts.

If possible, consider using established, secure online portals or in-person confirmation for new or changed instructions, as these methods offer additional layers of security. Many organizations also implement dual control systems, requiring two separate individuals to approve wire transfers, especially for new vendors or changes to existing payment details, providing an extra check against unauthorized transfers.

Actions for Suspicious Situations

If the verification process reveals discrepancies or if a wire request cannot be confirmed, funds should not be sent. Immediately contact your financial institution to report the suspicious activity and seek their guidance. Also, reach out to the intended recipient through a known, verified channel to alert them to the fraudulent request. This proactive step can help protect both parties from financial harm and help identify the source of the fraudulent communication.

If funds have already been wired to a fraudulent account, immediate action is necessary to maximize the chance of recovery, though success is not guaranteed. The first step is to contact your sending bank without delay to report the fraudulent transfer and request a wire recall. Banks will attempt to initiate a recall, but the speed of wire transfers means funds can be moved quickly by fraudsters, making recovery challenging. Concurrently, report the incident to the appropriate authorities, such as the Federal Bureau of Investigation’s (FBI) Internet Crime Complaint Center (IC3) at IC3.gov. Reporting to the IC3 provides federal law enforcement with data to track and investigate cyber-enabled crimes. Contacting local law enforcement and the Federal Trade Commission (FTC) at ReportFraud.ftc.gov can provide further reporting avenues and assistance.