Tuesday, November 29, 2022

Keep apprised of wire/ACH fraud attempts

OBA’s Fraud Department has seen a recent increase in reported cases of wire and ACH fraud attempts. The FBI has verified they are seeing at least one case per week in Oklahoma. We know our bankers are working hard to avoid these losses and wanted to share some recent cases and insights that might be helpful.

In the past week, we have seen two attempts to wire money from corporate accounts that followed and mimicked wires initiated by the companies. The first was a six-figure wire, not atypical for that company, and the second was in the tens of thousands. The FBI Cyber Crime Agents responded immediately to help in these cases and it is likely the speed of detection and quick reaction is helping to recover most of the funds in the first and even possibly in the second case.

These fraudulent wire requests can look just like those initiated by your customer and, sometimes, can even appear to be delivered through a secured email system if the customer’s computer has been breached.

Here are some reminders:

  • Revisit your policies for ACH and wire transfers. It is prudent to have a policy requiring a call-back on transactions over a certain amount and it should never be bypassed, even if it looks identical to previous transactions.
  • Most, if not all, of your insurance policies will have a caveat in your agreement similar to this language, “Under the terms of voice initiated or FAX transfers, the insured must place a verification call-back for each transfer in excess of $XXXX (an amount usually equal to the bond deductible).” This language has also been expanded to cover email transfer requests. Insurance requirements further specify that “for every transfer over the bond deductible, a call back procedure must be in place where a pre-determined contact is called and required to provide a pre-determined password/passcode of some type to maintain coverage for this type of fraud”.
  • As soon as possible after discovery, we need to get the FBI involved to increase the chances we are able to hold the money at the other end. If it is in the U.S., our friends at the FBI have been quick to help to hold funds especially if it has just occurred. Funds wired out of the country are less likely to be held and that means you should give even more scrutiny to funds being wired overseas before those transactions.
  • Money mule activity has also increased dramatically to help the fraudsters get these large dollar amounts out of the country. We continue to see individuals who think they have received an inheritance, won a lottery, in love with someone overseas, in business buying goods to ship or even simply shipping money to countries to help someone for a fee. You should be aware of your customers who might be actively participating as a money mule. Red flags can be large amounts of money wired into accounts with a typically low balance, then that customer is in a rush to withdraw large amounts. They may mention they are wiring funds through Western Union or a request a wire from your bank. The fraudsters have become organized and more sophisticated with the mules and now may pass the money through two or three hands before it leaves the country. The mules are most often unknowing victims, but are still responsible for returning the ill-gotten gains. The difficulty is these are very often persons with no means and little or no ability to repay the large dollar amounts they have wired.

Finally, filing SARs on cases of ACH or wire transfer fraud does help to get this huge spike in electronic fraud in front of the persons allocating manpower from our federal law enforcement agencies and ensures that we continue to get the necessary assistance. Be sure someone takes the time to get those Suspicious Activity Reports on record. Toward that effort, the U.S. Attorney’s Office in Tulsa has shared a PDF version of a Powerpoint presentation on the mechanics of good SAR preparation. Email elaine@oba.com if you would you like a copy. Another tool now more readily available to our bankers is the Senior Cents video we did with our Oklahoma APS to help train our bankers on how to handle cases of senior exploitation. The video is a few years old but still has great training information. Many of our banks have it on VHS tape and Jeremy uploaded it to a back page of our OBA website to facilitate its distribution. An email to Elaine at the above address will get that link to your inbox.

As always, our Oklahoma bankers continue to be the best at protecting our customers, both at the retail and individual level. Thanks for all that you do every day to make this happen and stay safe out there!