Money remittance, otherwise known as an electronic funds transfer, is the process of sending funds from one bank account to another. Originally, the term was used to describe a sum of money somebody working abroad would send back to their home country, but now it is used to describe any money transaction involving two separate account holders.
While the ubiquity of money transfer services provides convenience to millions of people worldwide, they also present a huge opportunity to scammers as they look for ways to capitalize from these systems. According to Statista, money (wire) transfers are by far the leading method of fraud loss in the United States, accounting for $439 million in 2019. The sad reality is that most of these losses would have been easily avoided if the victim had been more informed on what these types of scams look like and a few simple measures they can put in place to safeguard their funds.
What are money remittance operation scams?
In short, money remittance operations scams (bank transfer fraud) typically involves a scammer targeting somebody and convincing them to send funds to their bank account. These scammers use a variety of tactics in order to coax the victim into handing over their money, the majority of which tend to involve taking advantage of insecurities. For this reason, a large proportion of money transfer scam victims include the elderly, disabled, and those in disadvantaged positions.
Most of the time, the scammer will position themselves as some sort of authority figure to win the victim's trust. From here, they will create a sense of urgency by making the victim feel like they are under threat, and they stand to lose something (or will be in danger if they do not make a payment). Other times, the scammer will make an attractive proposition to the victim, sometimes offering them a reward (often financial). With that said, let’s now look at some tips you can follow to protect yourself and minimize the likelihood of falling victim to such scams.
Know what to look for
First things first, let’s take a quick look at some of the most common types of money remittance operation scams. After all, it’s hard to protect yourself from something that you can’t recognize.
● Phishing - Phishing scams are becoming more prevalent as we continue to transition into an increasingly digital world. Phishing involves a fraudster posing as legitimate companies, trusted associates, or familiar contacts to steal sensitive information, such as usernames, passwords, and bank account details. Once the scammer has this information, they can log into your bank and initiate a transfer themselves.
● Lottery and sweepstakes - Victims are notified that they have won a prize and need to pay a fee in advance in order to receive their prize money. This is one of the most common types of “advance fee scams.”
● Online dating - Scammers establish emotional connections with victims through online dating apps. Once the connection has been made, scammers persuade them to send them money, using various excuses.
● Charity - Fraudsters pose as fake charities and ask for donations.
● Person in need - Fraudsters have been known to hack into the personal email accounts of random people and then send a generic email to the entire contact list asking for money. The storyline is usually along the lines of being in a desperate situation and requiring an immediate bank transfer.
Always remain vigilant
Whenever you are asked for money, even if it seems like the contact is coming from a close friend or family member, it’s important to always remain vigilant. As I’ve previously stated in a post on DeFi scams, “‘One of the most important things to remember is to do your research before handing over your hard-earned cash.”
With this in mind, you must always double-check and verify the details of the person who is contacting you and is asking you for money. If they claim to be working for a bank or charity, ask them to confirm their identity. Once they give you their answer, do some research into the company and give them a call to ensure it is legitimate.
Watch out for the hallmarks of a scam
While each scam is different, many of them tend to have similar hallmarks that make them easy to identify. Here are a few of the most common:
● Urgency - Scammers usually attempt to create a sense of urgency. They will claim that “you must pay now,” or else you will miss out or face some sort of consequence.
● Unprofessional communication - Most scam emails include obvious grammatical errors or strange wording. If you receive an email asking for money, be sure to check spelling and grammar thoroughly. You should also follow the links within the email to see if they are working and what landing page they send you to.
● It seems too good to be true - Unfortunately, it’s very unlikely that somebody is going to call you out of the blue and offer you a large sum of money. If you have been told you have won the lottery or a long-lost relative has passed away and left you an inheritance, it’s highly likely it’s a scam. Always double-check with the official organization.
● Being asked to share personal information - Banks and professional corporations will never call you and ask for personal information.
Be cautious when using cryptocurrency
Due to the underlying nature of the blockchain, scammers have turned to cryptocurrency as a preferred method of payment. This is because these transactions are anonymous, instant, irreversible, and untraceable. If somebody ever asks you for a crypto payment, alarm bells should start ringing - especially if they contacted you out of the blue.
Final word
The best way to protect yourself from money remittance scams is by educating yourself on the common tactics used by fraudsters. Remember, never give any personal information to somebody you do not know (or cannot verify themselves), and if something sounds too good to be true - it probably is! Following the information in this article, you should be able to more easily highlight scammers when they contact you, which makes you far less likely to become one of their victims.
