By Ann Davidson
Many financial institutions--including various clients of Allied Solutions--continue to report that they have been personally affected by an occurrence of wire transfer fraud that has resulted in a large financial loss for their organization.
If your credit union offers any type of wire services to your account holders, please take the time to read the recommendations below and review your current policies to determine if you need to make changes to the security measures you have in place to better prevent wire fraud scams from penetrating your organization and account holders.
Wire Fraud Recommendations
- Implement multiple layers of authentication with your account holders, including the items below.
- Create a unique PIN or passcode for outgoing wire requests.
- Confirm a security question between the financial institution and the account holder.
- Obtain and call back multiple telephone numbers. (i.e.; cell, work and home). Never rely on only one call back telephone number.
- Confirm the account-holder has their cell phone and landline password protected to prevent the scammer from call forwarding of the telephone number.
- Consider not offering outgoing wires when the account-holder is not present, since most wire fraud instances are happening in non-face-to-face environments. In other words, do not accept wire transfer requests over the phone, via fax (even if they are notarized), through email, or by snail mail.
- If you do offer non-face-to-face outgoing wires, consider limiting the dollar amount to no more than $5,000.
- Label any outgoing international wire request “high risk” and take extra measures before performing the wire request or consider not offering international wire requests.
- Before performing an outgoing wire, confirm your financial institution and the account holder have signed and completed a wire transfer agreement that includes information about all of the authentication measures you require for wire transfers.
- Never rely on a single authentication method, such as a call back to the account holder’s listed phone number.
- Educate your account-holders and staff at all levels about wire fraud prevention.
- Ensure employees monitor wires closely to report anything that may seem out of the ordinary and advise them to report any suspicion directly to senior management.
- STAY ALERT! – You don’t want to be the next victim to wire fraud.
Wire transfer fraud scammers have become increasingly sophisticated and have become capable of a variety of tactics to obtain information for authenticating a wire transfer, such as forging a notary signature, forwarding calls from the account holder’s phone number, phishing account holders, moving funds from one account to another, and requesting changes on an account holder’s account before requesting the outgoing wire.
That is why we strongly recommend your financial institution implements robust security measures that include multiple layers of authentication in the wire transfer process.
Ann Davidson is VP of Risk Consulting at Allied Solutions. For info: www.alliedsolutions.net.