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5 Steps to Prevent Wire Transfer Fraud

By January 22, 2021July 7th, 2021Family Office Insurance
cyber-insurance

Wire transfer fraud costs companies and family offices billions of dollars in the United States. As of 2019, wire fraud through email has cost corporations $26 billion dollars, making it one of the costliest cyber crimes. With an increase of employees working from home during COVID, hack attempts and wire transfer fraud has increased substantially throughout 2020.

WHAT IS WIRE TRANSFER FRAUD?

Wire transfer fraud typically involves a hacker or other criminal that impersonates a senior level employee or individual requesting other staff members to wire money to an account.

Here are 5 steps you and your organization can take to help prevent wire transfer fraud:

1. FRAUD TRAINING

It is vital that staff, employees, and even individuals on a personal basis know how to identify fraud. Successful families and clients with a large number of assets are much more likely to be targeted and be victims of online fraud, too. Training can help ensure that everyone knows what to look out for.

Here are some common red flags of phishing or wire transfer fraud to look out for:

  • Urgent requests from CEOs or high-level employees
  • Insistence from the sender on email communication only, refusing phone conversations
  • Grammatical / spelling errors or strange words or phrases
  • Return email addresses or domain names are different or incorrect

2. WIRE CONFIRMATIONS

Wire confirmations are an easy way to help stop fraud. Make sure that any requests for wire transfers are confirmed ahead of time with a phone call. Use phone numbers from prior correspondence with the vendor or organization and confirm any changes to the account information directly over the phone.

3. SEGREGATION OF DUTIES

Make sure that more than one person is responsible for the outgoing payments or funds transfers. This helps ensure that the entire process is not controlled by one person – helping to stop wire transfer fraud before it occurs.

4. REGULAR SECURITY AUDITS

Security audits are important and should be completed by your IT vendor or provider. There should be a checklist in place to make sure that your organization is following the best practices to help prevent wire fraud.

5. CYBER INSURANCE COVERAGE

Cyber insurance coverage is important to businesses and individuals to help relieve the financial burden of a loss due to wire transfer fraud. However, it is important to work directly with your trusted insurance advisor to ensure that your cyber insurance provides coverage for wire transfer fraud and social engineering.

There are steps you can take to help prevent your organization or your household from being a victim of wire transfer fraud. If you are interested in learning more about the cyber coverage products that we offer at Sterling Coverage, please contact us today.

Reposted from Evarts Tremaine

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