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Best Practices: Preventing Wire Fraud
Post on May 10th, 2022

We’re revisiting this topic to remind you of important steps you can take to prevent wire fraud. Losses from wire fraud were up 33% in 2021 over 2020. The monetary losses from wire fraud were almost $2.4 billion. With an increase in the number of real estate transactions as well as cyber breaches, this information can save you from making a costly mistake.

Typically, the fraudster for wire fraud has hacked your or another party’s email and follows a transaction as it progresses. Just as the transaction nears completion, an email is often sent (by the fraudster appearing as a legitimate party) requesting a change to the existing wiring instructions to send the funds to a different bank account.  If this happens – STOP and think! The fraud cannot occur unless YOU make the requested changes!

Take these steps to prevent wire fraud:

  1. Always verify, BY TELEPHONE CALL, the changed instructions using KNOWN contact information of the purported requesting party.
  2. NEVER use contact information contained in the email or other communication requesting the change. Do not click on any links in the email. Use a different method for verification from how the change request was sent.
  3. Have a Wire Fraud Reduction Policy that requires specific procedures be followed for outgoing wire payments. See OBLIC Cyber Toolbox for a sample Wire Fraud Reduction Policy.
  4. Designate specific employees who are authorized to send wire transfers. Train these employees to always verify over the phone new or changed banking account information or payment instructions, immediately report any payments made in error to the parties involved, to the concerned banking entities and to law enforcement.
  5. Regularly provide training on wire fraud to your lawyers and staff. See OBLIC Cyber Toolbox for Wire Fraud Training materials.

If you have questions about this topic, the OBLIC Cyber Toolbox, or any other loss prevention topic, please contact us. We’re here to help you!

Gretchen Mote, Esq
Director of Loss Prevention
Ohio Bar Liability Insurance Co.
Direct:  614-572-0620
Email: [email protected]
Monica Waller, Esq.
Senior Loss Prevention Counsel
Ohio Bar Liability Insurance Co.
Direct:  614-859-2978
Email: [email protected]