Wire Transfer Fraud

We represent companies and individuals who are the victims of wire transfer fraud.

For the past ten years, wire transfer fraud losses have increased consistently, with bad actors developing more sophisticated schemes each year with which they can defraud their victims. One particular type of highly reported wire transfer fraud has been Business Email Compromise / Email Account Compromise (BEC/EAC). Wire fraud in the form of BEC/EAC is a sophisticated type of scam that targets both businesses and individuals during the planning for and act of wiring funds from one bank to another.

The BEC/EAC scam often starts with the bad actor compromising legitimate business email accounts using a form of hacking or through social engineering. With access to a legitimate email account, the bad actor can monitor conversations to detect the possibility for the need for a future wire transfer. At this point the scam can unfold in a variety of ways, but the end result is often a party wiring funds not to the intended recipient, but instead to a bank account controlled by the bad actor.

Bad actors have various ways of contacting their victims to persuade a wire to occur. Along with emailing, they may also initially call or text potential victims to establish trust and reinforce they are the only authority figure that can assist with protecting a victim’s funds. After securing the trust of a victim, bad actors may convince them to wire their funds to a secondary location, or even open a new account, that in reality solely funds the bad actor.

Consumer and business losses from wire fraud are staggering.

The losses from wire fraud are large and continue to have a major impact on businesses, and the impact on individuals can be devastating. Overall losses from BEC/EAC type of wire fraud alone have increased each year from $1.29 billion in 2018 to a staggering $1.86 billion in 2020.

Investment scams resulted in victims losing $4.57 billion in 2023, a 38% increase over 2022. Telephone scams resulted in victims losing almost a billion dollars in 2023, with over 50% of the victims being over the age of 60.

Real estate is a particularly high risk sector for wire fraud. In 2020, 13,638 people were victims of wire fraud in the real estate and rental sectors, with losses in excess of $213 million, according to the FBI. With wire fraud in the real estate sector, the bad actors often assume the identities of real estate agents, escrow officers, or closing attorneys, to encourage victims to wire funds to the criminal’s bank account.

For years, Kronenberger Rosenfeld has helped victims of wire fraud. Sometimes our firm’s goal is to identify those responsible for intrusions into email accounts, for engaging in telephone fraud, or for establishing bank accounts for the fraud; however, our goal can also be to identify, or exclude, employees, family members, or others with close contact with a victim, as potential wrongdoers. Often the negligent actions of a third parties lead to losses from wire fraud - from banks, to technology consultants, to payroll services. Our firm assists clients in identifying all potential sources for recouping wire fraud losses, including criminals acting intentionally and third parties acting negligently. Kronenberger Rosenfeld has and will continue to take legal action against banks, (Chase, Bank of America, Citibank, Wells Fargo, Citizens Bank, and others) and non-bank financial institutions (Fidelity, Charles Schwab, PayPal, Zelle, Cashapp) that are negligent in protecting their clients’ assets.

The good news for consumers is that recent case law has expanded the legal options for consumers seeking remedies for wire fraud. For example, an unauthorized savings-to-checking account transfer make by a bad actor immediately prior to an unauthorized wire transfers is covered by the consumer-friendly Electronic Funds Transfer Act (EFTA). Furthermore, the Consumer Financial Protection Board (CFPB) has clarified that when banks withdraw money from a consumer account and deposit it into a "pooled account" after an unauthorized wire transfer request and just before initiating a wire, the transfer to the pooled account is also covered by the EFTA. Luckily, consumers have significant remedies against banks under the EFTA.

If you or your company is the victim of wire transfer fraud, we would be happy to help.

We welcome you to submit the details of your wire transfer fraud matter using our online case submission form or by calling us at 415-955-1155, ext. 120