Wire fraud costs small businesses millions annually. Learn how to implement practical controls that prevent unauthorized transfers and protect your company finances.
Wire Fraud Losses Are Skyrocketing
Wire fraud is now one of the most costly crimes targeting small businesses in New York and nationwide. Scammers use social engineering, email spoofing, and hacked email accounts to convince employees to wire money to fraudulent accounts. The average small business loss from a single wire fraud incident exceeds $50,000, and many companies never recover the stolen funds.
Unlike credit card fraud, wire transfers are nearly impossible to reverse once they are sent.
Wire Transfer Controls That Work
Implement a verification protocol for all wire transfer requests. Require that wire requests come through a specific channel and that they be verified by calling the requestor using a known phone number. Never use contact information from the request itself. Create a second-approval requirement for wires over a certain threshold.
Maintain an audit trail of all transfers and approvals. Require written documentation of wire authorization.
Email and Account Security
Wire fraud often starts with a compromised email account. Ensure all employees involved in financial processes use strong, unique passwords and have multi-factor authentication enabled on their work accounts. Regularly audit who has access to initiate wires and remove access from anyone who no longer needs it.
Train your finance team to spot red flags: urgency in the request, unusual wire amounts, requests to wire to new vendors, or requests to wire to unfamiliar accounts. When in doubt, contact the requestor through a direct phone call to verify.