The Trusted Adviser
April 2014 | Volume 7 · Number 4


Five Ways to Reduce Exposure to Wire Fraud

Protect Your Client and Your Practice

Ron Trubiana photoIncidences of fraudulent wire transfers are on the rise. Several ATG agents have had their systems attacked, but were able to detect the problems before their systems were compromised. Upgraded vigilance is necessary to protect your escrow accounts from attack. We recommend ATG agents take the following precautions:

  1. Guard your account number and bank routing number;
  2. Limit or ban access to social media websites on office computers;
  3. Use elecronic banking;
  4. Be cautious when delivering wiring instructions; and
  5. Be vigilant in monitoring your bank accounts and transactions.

Guarding your account number and bank routing number are very important in protecting against fraudulent transactions. Both of these numbers are readily available, and having them is all a fraudster needs to perpetrate an attack. These numbers appear on every check you write. You give this information to anyone who requests wire information for a transaction.

Social websites are a major source of a multitude of viruses and other malware that could wipe out your account balance. One in particular is quite deadly: It waits in hiding for you or someone in your firm to access your bank’s website. When you are ready to do a wire transfer, behind the scene the payee and bank information is changed to that of the fraudster, without you knowing about it. You think you had a wire sent to party A, but it was hijacked to different bank. These fraudsters are good at what they do. The wire will go to a domestic bank first and is ultimately wired outside the country. Please keep this in mind: Once the money leaves the country, it is almost impossible to recover.

To protect yourself, consider using electronic banking. Many people shy away from electronic banking for fear of a fraudulent attack. For the bad guy, it is easier to gain access to your account and routing number than it is your ID and password. The reason electronic banking is important is it is much easier to detect the potential fraud early on instead of waiting until you receive your bank statement.

Be cautious of how you deliver wiring instructions. Ensure that your internal procedures relating to the sending of a wire are strong enough to prevent a fraud. Have procedures in place that require two people to send a wire — one to initiate and one to approve. Many banks today have changed their banking agreements to specifically say that the bank is not liable should an unauthorized wire be sent from an account that does not use two people to send it. Consider using one computer exclusively for wire transfers. If you cannot dedicate a computer solely to wire transfers you should ban access to social media websites, as this is the main source of malware used to hijack accounts.

Lastly, be vigilant in monitoring your banking information.

Ron Trubiana
ATG Senior Vice President and Chief Financial Officer

EDITOR'S NOTE: For detailed information about protecting yourself from other forms of cyber crime, see LawPRO’s AvoidAClaim blog: Protecting Yourself from Cybercrime Dangers: Lock Down and Protect Your Data Wherever it Is. See also Email Wire Fraud Scheme Warning.

[Last update: 4-30-14]

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