Money transfer fraud is a serious issue for businesses. In fact, it is the most common type of fraud reported by businesses. If you are not aware of the red flags to look out for, you could be at risk of losing a lot of money. In this blog post, we will discuss what money transfer fraud is, how to spot the red flags and what you can do to protect your business.

What is Money Transfer Fraud?

Business money transfer fraud is a type of fraud that can occur in a number of ways, but typically involves the use of false or misleading information to convince a business owner or employee to send money to a third party. In some cases, the fraudster may pose as a legitimate business or individual in order to gain your business’s trust. Once the fraudster has your trust, they will often ask for access to your business’s bank account or financial information in order to make the transfer.

Common Tactics

• Posing as a legitimate vendor or supplier: Fraudsters will pose as a legitimate vendor or supplier in order to dupe businesses into making payments to them. They do this by setting up fake websites and email addresses that mirror those of a real company, or by calling businesses pretending to be from a vendor. 
• Requesting early payment for goods or services: Fraudsters may request early payment for goods or services that they claim to have supplied. They may do this by sending fake invoices to businesses, or by calling and demanding payment. 
• Promising high returns on investments: Fraudsters try to scam businesses by promising high returns on investments. They may do this by offering to invest business money in a new venture or project. They may also offer to lend money at a low interest rate for a fee. Once you transfer the money, you never hear from the fraudster again.

Red Flags of a Money Transfer Fraud

There are several red flags to look out for, such as:

• You receive an invoice from a supplier that you have not used before.
• The invoice is for an unusual amount of money.
• The payment details on the invoice are different from the supplier’s usual payment details.
• You receive an email from someone claiming to be from your bank. The email asks you to update your account details. This is called phishing. Do not respond to these emails or calls, and do not click on any links in them.

If you suspect that you have been a victim of money transfer fraud, contact your bank immediately. They will be able to investigate the transaction and, if possible, refund your money. Then immediately change your passwords to all affected accounts. Review your security procedures and educate your employees about how fraudsters perpetrate money transfer schemes. Finally, go to our business money transfer fraud page to find out where to report.