Companies can prevent wire transfer fraud by combining strong internal processes with automated account validation. Segregation of duties, approval workflows, and continuous training reduce human error, but fraudsters exploit gaps faster than manual controls can catch. Automated account validation adds the missing layer: verifying bank account ownership in real time, and blocking fraudulent payments before they go through. Last year, 93% of UK company were targeted by payment fraud at least once. Recovering wire money once defrauded is hard – almost impossible. Read on to find out more.
Wire Transfer Fraud: Key Takeaways
- Wire transfer fraud tricks companies into sending money to fraudulent accounts through BEC, phishing, or fake vendor requests.
- Losses are often irreversible, making prevention far more effective than recovery.
- Red flags include urgent payment requests, banking detail changes, and suspicious emails.
- Best prevention = internal controls + automated account validation to verify ownership in real time.
- Strong fraud defenses also support regulatory compliance and protect reputation.
What is wire transfer fraud?
A definition
Wire transfer fraud is a popular type of payment fraud that happens when fraudsters ask you to send money under false pretenses. It’s a form of online theft that usually uses spoofing (or identity theft).
They do it by impersonating someone you trust, like a supplier, or people with innate authority, like a representative from a government agency or the CEO of your firm.
Scamming scenarios are often elaborate and convincing: they can ask you to urgently wire money to finalize a strategic deal. There is often an element of pressure to it, so their unsuspecting victim doesn’t take the time to rationally think about what’s being asked.
In 2015, Xoom lost more than $30M through CEO fraud. One of their financial executives got tricked into sending money, thinking their boss was asking for it.
Wire transfer scams work because of their immediacy. Once the money has been transferred, it land almost immediately in the malicious hacker’s account.
Although traditional wire transfers take 1 to 2 business days, the recent move towards instant payment methods means the money can be credited in a matter of seconds.
What are the financial and reputational impacts of wire transfer fraud?
Wire transfer fraud can devastate organisations on two fronts: finances and reputation.
The financial losses are often immediate and unrecoverable, as the wire funds are quickly moved through multiple accounts or converted to crypto. Beyond the direct cost, organizations face operational disruption, unexpected legal expenses, and potential regulatory fines if controls are deemed insufficient.
On the reputational side, wire transfer scams erode trust with suppliers, clients, and stakeholders. Vendors may hesitate to extend credit or continue partnerships, while investors and auditors may question the company’s governance. Publicly disclosed incidents can also damage brand credibility and weaken competitive standing. This combination of lost capital and shaken confidence makes prevention, through strong processes and automated fraud prevention, far less costly than recovery attempts.
Lee-Ann Perkins, experienced treasurer in the US, shares her own story.
What are the most common scams?
The most common types of wire transfer fraud are:
- Business Email Compromise (or BEC)
- Phishing and spear phishing
- Vendor fraud
- AI-Powered Deepfake Scams
While the tactics may vary, the goal is the same: to manipulate your team into sending money to a fraudster
1. Business Email Compromise (BEC)
BEC is one of the most prevalent forms of money transfer. It involves fraudsters impersonating a senior executive (like a CFO or CEO) or a trusted supplier using a lookalike email address. The attacker pressures an employee – usually in finance or accounting – to urgently send money to a fraudulent account.
Example: A finance team member receives an email from what appears to be the CFO, instructing them to urgently transfer \$250,000 to a new vendor for a strategic acquisition. The email domain is nearly identical (e.g., `@company.co` instead of `@company.com`). The employee follows through, only to discover days later that the CFO never made the request.
2. Phishing and Spear Phishing
Phishing scams trick employees into clicking malicious links or providing sensitive information via fake emails or websites. Spear phishing is a more targeted version, often aimed at specific roles within the organisation. Real life cases of spear phishing right here.
Example: A vendor sends an invoice via email, prompting the AP team to log in to a fake payment portal that captures login credentials. The attackers then access the real system and change the vendor’s bank details to divert future transactions.
3. Vendor Fraud
Attackers pretend to be legitimate suppliers and request changes to payment instructions, usually via email. These requests often come from hacked vendor inboxes or fake lookalike domains.
Example: A fake email, supposedly from a long-standing supplier, informs the accounts payable team of a new bank account for future invoices. Without verification, the team updates the records. Discover more real life cases of vendor fraud in this article.
4. AI-Powered Deepfake Fraud
Criminals now use AI to mimic voices and even video likenesses of executives to validate fraudulent requests. This tactic increases the perceived legitimacy of the scam.
Example: A controller receives a phone call with the voice of the CFO confirming an email payment request. The voice sounds authentic, because it is a deepfake generated from public recordings. Trusting the voice confirmation, the controller proceeds with the transfer.
What are the red flags of wire transfer fraud?
Here are key red flags to detect wire transfer fraud before it happens:
- Urgent or unusual requests. If a payment request is marked as urgent or doesn’t follow the usual process, especially from senior executives or new suppliers, pause and verify. Fraudsters often rely on urgency to bypass internal controls.
- Changes to vendor banking details. Any request to update supplier bank account information, especially when communicated via email, should trigger a verification process. This is a common tactic in vendor fraud.
- Unfamiliar or inconsistent email addresses. Check email domains carefully. Fraudulent addresses often mimic real ones (e.g., `@supplier-pay.com` vs `@supplierpay.com`). Inconsistencies in tone, grammar, or formatting can also signal something is off.
- Unusual timing or location. Emails sent outside business hours or from unfamiliar IP locations should be treated with caution, particularly if they involve financial instructions.
- Pressure to bypass standard procedures. If someone asks to skip a second approval, avoid a call-back, or ignore usual compliance steps, it’s a red flag. Legitimate vendors and internal stakeholders should never second-guess secure processes.
Spotting potential warning signs early can save your organization from significant financial loss but won’t replace setting up solid prevention strategies like automated account validation.
How to prevent wire transfer fraud: best prevention strategies
To avoid falling victim to this type of scam, organisations can:
- Increase safety measures and internal controls
- Use fraud prevention software like Trustpair
Recovering money from fraud is complicated and without any guarantees. What you can control, however, is ensuring that you adopt adequate prevention measures to avoid wire transfer fraud. It’ll save you from future financial (and reputational) losses.
Increase your safety measures and internal controls
Working with your IT team, you can start improving your cybersecurity protocols. That looks like:
- Setting up strong password requirements so hackers cannot guess or hack them too easily.
- Adopting multi-factor authentication to ensure the person logging into your network and key software has authorization to access it.
- Requesting your employees never reveal any personal information like their phone numbers or social security numbers to any unknown or phony-looking sender.
Besides direct cyber security, it’s important to adopt better safety processes.
Adopting the concept of segregation of duties in your departments ensures no one person has too many responsibilities. It’s harder for online scammers to be successful when several people are involved. Furthermore, it’s a good way to prevent and reduce internal fraud risks.
When it comes to fraud detection, the 4-eye principle will also work in your favor. Requiring a minimum of two people (so, four eyes) to verify your transactions and other key operations reduces risks.
Last but not least: make sure your team receives regular and up-to-date security awareness training. It should be given several times a year by security experts, and include real-life cases of the most recent scams. Teach your team to spot phishing emails, to watch out for too-good-to-be-true offers, or what to do when they have a scam artist over the phone (hang up!).
The more effort you put into your prevention, the more aware your team will be. Your employees are a good barrier against fraud, but they’re not infallible.
The best prevention strategy: bank account validation
The most effective way to stop wire transfer fraud is to verify bank account ownership in real time before transactions are executed. Automated account verification eliminates the guesswork and human error behind manual checks, ensuring that funds are only sent to legitimate beneficiaries. This layer of protection is critical because it blocks fraudulent transactions at the source, before money ever leaves your company’s accounts.
Why Trustpair is the trusted choice
Trustpair takes automated account validation a step further by combining international data sources, continuous monitoring, and advanced detection technology. Every vendor is verified automatically, suspicious patterns are flagged, and dodgy transfers are blocked before approval. Whether transactions are domestic or cross-border, Trustpair gives finance teams the confidence that every transaction is secure.
Regulatory and compliance considerations
In the UK, wire transfer scams aren’t just a financial risk, they’re a major compliance issue. Finance and treasury teams are expected to implement robust internal controls and comply with regulatory frameworks designed to prevent fraud, money laundering, and unauthorised payments.
Here are some of the key UK regulations and guidelines relevant to wire transfer fraud:
- The Money Laundering, Terrorist Financing and Transfer of Funds Regulations 2017: This regulation mandates financial institutions and large corporates to perform due diligence, report suspicious activity (SARs), and maintain controls to prevent money laundering.
- The Proceeds of Crime Act 2002 (POCA): Under POCA, failing to report suspicious transactions could result in criminal liability. This includes suspected wire fraud or attempted money laundering via vendor impersonation.
- The Sanctions and Anti-Money Laundering Act 2018 (SAMLA): UK organisations must ensure that transactions are not processed to individuals or entities subject to UK government sanctions. A fraudulent transfer to a sanctioned entity can result in serious penalties and reputational harm.
- The Companies Act 2006 & UK Corporate Governance Code: These frameworks expect UK companies – particularly listed ones – to implement effective risk management and internal control systems to prevent fraud, ensure accurate financial reporting, and protect stakeholder interests.
- FCA Expectations: While not a law per se, the Financial Conduct Authority (FCA) sets out clear expectations for authorised firms to manage operational and fraud risk, particularly as part of their systems and controls under the Senior Managers and Certification Regime (SM\&CR).
Failure to comply with these regulations can lead to regulatory enforcement, significant financial penalties, and long-term reputational damage.
What are the steps to get your money back after a wire transfer scam?
The three critical steps to have a chance at recovering lost funds are:
- Calling your bank
- Contacting law enforcement
- Identifying the breach internally
When you discover the fraud, it’s a race against time to start the recovery process. You need to act fast before:
- The funds are transferred to other bank accounts,
- Withdrawals are done to begin laundering the money,
- The funds are converted to cryptocurrency.
If any of that happens, you are even less likely to recover funds.
Of course, imposters know that, so they try to slow down your response time even further. They commit wire transfer scams on a Friday afternoon and even go as far as contacting you pretending to be your bank investigating the matter — giving them further time.
And unfortunately, with this type of fraud, fund recovery is never guaranteed. If you’ve been scammed, it’s highly unlikely you’ll ever see this money again, and your odds diminish with each passing hour.
1. Call your bank
The first thing to do when you become aware of the fraudulent money transfer is to contact the financial institution you used to send money.
Call your bank and ask them to initiate a SWIFT recall. Explain you’ve been the victim of bank transfer fraud and that you need to freeze the wire transfer.
From there, there are two scenarios:
- If the funds haven’t left your account yet, you might be able to stop the transfer and not lose your funds.
- If the funds transfer has already been deposited to the payee’s account, however, things are not looking good for you. The cybercriminals may already have moved the money to another bank account.
It’s still worth asking your bank to call the recipient’s bank fraud department so they can freeze their account. If the money was indeed transferred to another account, then you need to contact the third correspondent bank.
You have to call each intermediary bank personally to explain the situation and freeze the whole chain of accounts in the different banks.
Remember to make a list of your phone calls with the time you called and the details given, it’s a tedious task that can quickly get overwhelming.
2. Contact law enforcement
If your organisation has fallen victim to a wire transfer fraud in the UK, it’s crucial to report the crime as quickly as possible. Several agencies and authorities can support you in the recovery process:
- Action Fraud – This is the UK’s national reporting centre for cybercrime. You can file a report online or by phone, and you’ll receive a crime reference number that can be used with banks and insurers
- National Fraud Intelligence Bureau (NFIB) – Operated by the City of London Police, the NFIB analyses fraud reports submitted via Action Fraud and may pass your case to local police for investigation.
- Financial Conduct Authority (FCA) – If the scam involved a regulated financial institution, the FCA should also be informed, especially if you believe there are systemic issues (FCA).
- Solicitors or in-house counsel – Engaging legal experts is key to navigating complex recovery processes, liaising with law enforcement, and preserving evidence for potential litigation.
3. Identify the breach
Recovering your funds can take a while. There are a lot of actors who need to get in touch, all with different internal processes. Check in regularly with the relevant organizations, but also be patient.
While you’re waiting, there is more work to do!
If you haven’t already, speak with your IT security team. They’ll probably have started acting on your contingency plan, but double-check that all your passwords have been changed and your security reinforced. Make sure the perpetrators cannot strike twice (they often do).
It’s also essential to find where the breach originated. Once more, your IT team should have its own protocol to follow in case of a security breach. They’ll have made a mirror copy of your system when the breach happened, so they can find the leak, like malware on one of your employee’s devices.
Looking into the future: AI and Wire Transfer Fraud Increases
The rise of generative AI is making scammers more sophisticated than ever. They now use AI to create deepfake voices, mimic emails, or generate realistic invoices that bypass manual checks.
This means traditional defenses like callbacks or visual inspection are no longer enough. As scams become faster and harder to spot, finance executives must reinforce their defenses with automated account validation and continuous monitoring.
Staying ahead of AI-driven thefts requires best-in-breed prevention tools of your own