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Can a Wire Transfer Be Reversed?

Fraudulent scams are at every turn. It’s no surprise that wire transfers – one of the fastest, easiest ways to send money – can be a target. Though, many businesses around the world use wire transfers to send and receive money every day. 

Once you send a wire transfer, the chance of wire transfer reversal is very slim. Depending on your bank and the recipient bank, you may qualify for extenuating circumstances, but it is rare. So whether you discover a fraudulent transfer or have been the victim of a scammer, you may lose that money for good.

The best thing you can do to reduce your risk of wire transfer fraud is to know what to look for and take steps to protect yourself. 

Prevalence of Wire Transfer Fraud

You may use wire transfers in your everyday business. Or you may only be using a wire transfer for the closing on a piece of real estate. It only takes one moment for the wire instructions to end up in the wrong hands — sending you down a rabbit hole of scams and fraudulent transactions. 

According to the latest records released in February 2021 by the Federal Trade Commission, there were 2.2 million reports of fraud reported by consumers in 2020. Of these, 56,811 were reported wire transfer fraud with a total loss of $311M. 

Spot Scams Before Your Wire Money

There are things you can look for so that you don’t fall victim to wire transfer scams. For instance, there are: 

  • Tech support scams attempt to gain access to your computer by pretending to be tech support from a well-known company. You give them control of your computer and they can wire funds to their accounts before you even realize it happened. 
  • Online shopping scams request you to wire money or use a mobile payment app because this makes the funds available immediately – without the risk of you being able to reverse the transaction. 
  • Family scams usually start with someone reaching out claiming they are long-lost relatives with sob stories and in need of emergency funds and ask you to wire money. 
  • Romance scams are those that involve someone trying to strike up a relationship – and then seek money via wire transfer to come to visit you. 

Real Estate Wire Transfer Scams

Real estate wire transfer scams are becoming more and more common. These scams target those who are in the process of buying or even refinancing a home or piece of property. Scammers use emails that seem legitimate in order to impersonate an important person within the closing team — usually a realtor, escrow officer, attorney, or even the lender. 

From that point of contact, fraudulent wire instructions are provided. Since this is all part of the process and the email seems real, it is not uncommon for buyers to go ahead and submit funds to the fraudulent account via wire transfer. And, remember, wire transfer reversal isn’t likely. 

To protect yourself from real estate wire transfer scams, always speak to the person the money is going to via telephone before you wire the funds. Call these individuals based on telephone numbers you have previously used or from their website online. Do not contact the individual using the telephone number provided in the email. Once you have them on the line, confirm the correct wire instructions. 

Of course, making use of secure, encrypted portals such as Closinglock can greatly reduce any risk. The system is designed to remove wire instructions from emails so that potentially devastating issues can’t happen. And with the ability to tell the consumer to never trust any wire instructions via email, Closinglock is a simple solution.

Protect Yourself from Fraudulent Wire Transfers with Closinglock

Closinglock offers wire transfer fraud protection that can keep your money safe – and out of the wrong hands. Using a secure portal, closing and settlement companies can share wire instructions that require multi-factor authentication to access. Any potential signs of fraud will pop up with warnings throughout the entire process. 

Closinglock’s simple program is easy to use and can protect everyone involved with the transfer of funds. To learn more, contact our professional team today!