The term “Wire Transfer Fraud” started in the origin of this type of crime – wire transfers, which is the transfer of funds between banks across telegraph wires and shortly thereafter phone lines. It has grown to cover any bank fraud that involves electronic communication mechanisms instead of face-to-face communication at a financial institution. It also involves the fraudulent attainment, by way of false pretense, of banking information to gain access to another person’s bank account.
This kind of attack against businesses and other organizations (municipalities and schools have been hit hard by this kind of attack) has become a significant threat to an organization’s financial well-being. Much of business today is conducted remotely – either over the phone or (more often) through email. Without that face-to-face verification of someone’s identity, it is possible for an attacker to trick either party in a transaction into transferring money to their bank account instead of the intended recipient’s, or deceiving a party into thinking that a transfer of funds is necessary when it is not, providing fraudulent bank account information.
Two real-world examples illustrate the most common methods these attackers use to accomplish wire transfer fraud (neither takes particular technical skill):