For most people, money transfers can be an excellent way of sending money to a loved one studying abroad, investing in real estate, or managing business transactions. However, the sad reality is that the ability to send money long distances can also be used to scam others. Being aware of common money transfer scams will help protect you and your loved ones from unscrupulous scammers.
Escrow Transfer Scams
A major part of most real estate transactions is transferring thousands of dollars into an escrow account, and scammers take advantage of this knowledge by tricking new buyers. They will send out emails or phone calls telling the buyer that their transfer instructions have changed, and then they pocket the money when the buyer transfers the money to the wrong account. People can avoid this by always verifying that they are sending money to the right place. They should only trust transfer instructions communicated to them from their real estate or escrow agents’ official phone numbers and emails.
Loved One Has an Emergency Scam
A new and particularly cruel scam consists of scammers calling or emailing a target and telling them that the person’s loved one is in jail, kidnapped, in the hospital or otherwise in trouble. Then they will tell the person that they need to send a wire transfer immediately or the loved one will be in danger. It is easy to panic in this situation. Still, people need to realize that it is now very easy for hackers and scammers to find out the names and personal information of a target’s entire family. It is important to question the person carefully, asking information only the loved one would know. Before sending money, people should also call their loved one to see if they are safe and call the official number for the hospital or jail to see if the person is really there.
Many scammers are listing projects for abnormally low prices on eBay or Craigslist. Then, when a target expresses interest, they reach out to the person and tell them they only accept money transfers. Never pay for online goods with a money transfer, because you have no recourse if the item is never sent. Instead, use Paypal, a credit card, or another payment option where you can reverse the payment if the person does not give you the item.
The sad reality is that many money transfer scams involve the victim willingly and purposefully transferring money abroad because they think they are in a relationship with the recipient. People will set up a fake profile on social media or dating websites, use it to start a long-distance relationship, and then ask for money to help with expenses, travel to your country, or help a sick relative. It is important to always video call a person to ensure you are talking to the person pictured in the profile, and you should be cautious of any online friends or partners who ask for money.
Fake Check Scams
There are a variety of scams that involve giving a person a check then telling them to deposit the check and keep part for themselves before sending on the rest of the check via wire transfer. However, the check will eventually bounce, and then the scammer will keep the funds. There are all sorts of seemingly legitimate situations where this might happen. A person may overpay for an item via check and then ask you to wire back the difference, or someone may offer you a job as a secret shopper that asks you to wire money as a confirmation of identity. In general, never wire funds from a check until the check has cleared.
Fake Lottery, Sweepstake, Credit Card, or Loan Scams
Another common type of scam involves calling, emailing, or mailing out a notice telling people that they have won a lottery, won sweepstakes, or can apply for a credit card or loan without needing a credit check. People are then instructed to wire money for processing fees or taxes, but once they do, they never get the prize or line of credit they applied for. In some cases, the scammers may use the person’s account information to steal even more money from their bank. For these scams, it is important to remember that if something seems too good to be true and requires you to send personal information or a wire transfer before you get funds, it is probably a scam.
With a little knowledge, it is very easy to avoid most of these scams. By being cautious and always verifying information before sending money, you can make sure the right person gets your transfer.