Protecting yourself from wire transfer scams and fraud

Experts are warning about the prevalence of wire transfer scams, especially during the holiday season. Wire transfer fraud causes billions of dollars in losses to consumers every year.

Two KTLA viewers reached out after experiencing a combined loss of over $120,000 due to wire fraud scams.

“It’s just very frustrating and very scary,” said victim Martina Boyeras Carbonell. “I feel violated. All my personal information is out and all my savings are gone.”

Carbonell recently lost nearly $42,000 to a wire-transfer scam involving her bank account. And she’s not alone.

According to the FBI, about $2 billion is lost annually to wire-transfer fraud. Some cases involve newfangled payment apps such as Zelle while others rely on traditional fund transfers from bank accounts.

“Unfortunately, it’s being used by a lot of fraudsters who are using social engineering tricks to convince consumers that they work for the bank or they’re there to help them in some regard,” explained Linda Sherry from Consumer Action. 

In Carbonell’s case, the Atwater Village resident said she received bogus texts and calls from people claiming to be Chase bank employees. The scammers had done their homework.

“They already had my card numbers, my address, my account number, the name of my company, everything,” said Carbonell.

What the fraudsters apparently lacked was the password for her business account, which Carbonell said she may have unwittingly provided when she checked her account online during the two hours she was kept on the phone.

Sue Solleder, a real estate broker in San Diego County, lost more than $81,000 after hackers gained access to her Chase business account and made repeated attempts to wire money elsewhere.

She said Chase prevented the first 10 attempts from going through, but it green-lighted the next five. Solleder’s funds were whisked away to Delaware and then to Abu Dhabi.

“I just was so shocked,” said Solleder. “I never heard of anybody taking $81,000 from somebody.”

Even worse, after she brought the matter to Chase’s attention, the bank denied her claim for compensation, saying the cash transfers “were authorized” by Solleder.

That’s a key point. Banks exploit a loophole in federal banking rules that free them from compensating people if they decide the customer “authorized” a transaction by providing information that facilitated the transfer.

So how can you protect yourself?

  • Never rush into a wire transfer or other unexpected transaction.
  • Call the bank yourself and confirm if there’s an issue with your account.
  • If you’re victimized, have the bank verify that you didn’t authorize the transaction.

After we spoke to Chase about the theft, the bank said it would fully compensate Solleder for her missing $81,000.

A bank spokesperson said it was clear her account had been hacked even though the bank previously insisted she was partly to blame.

In Carbonell’s case, Chase at first insisted that she wouldn’t be compensated because she provided information to con artists. After I pointed out that she was tricked into doing so, Chase reversed course and said Carbonell would be paid back.

Consumer advocates say banks need to improve by doing a better job of spotting and preventing suspicious wire transfers.

“Their system is weak,” said Carbonell. “Hackers are able to get into personal accounts, business accounts and on top of that, they blame the customer.”