Federal Trade Commission – Scams to Avoid on Money Transfers

February 14, 2017 | By More
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money transfer scamsThe words identity theft, scams, hacking, malware and the like are unfortunately a part of our daily financial experiences now.  It puts a tremendous responsibility on the money smart consumer to become educated about these issues.  Why?  As good as the systems are that we engage including our banks, online shopping brands, and employers (specifically payroll processing), fraudsters and scams can still touch our money life. Today, we want to address one particular scam – money transfers or wire transfers – that you can avoid.  You can avoid becoming a victim of a money or wire transfer scam by learning everything you can about it.

A good place to begin is the Federal Trade Commission (FTC) website. There are several videos to watch, which we will provide linkage in our Tips to Read below.  However, let’s provide you a list of some facts and best practices when it comes to money transfers to jump start your review.

What is a money transfer?
A money transfer, also known as a wire transfer, is the means in which money is sent electronically from you to the receiving party.  Today, consumers can send a wire using their bank or a third-party provider like Western Union.  (If you would like to know more about the basics about wire transfers, Spencer Tierney at NerdWallet wrote a good article. See Endnotes below for a link.)

The key issue to remember is that when you affect a money transfer, you are sending cash.  In other words, once the money is sent, you can’t get it back.  It is for this reason that you want to avoid money transfer scams.  It is the reason the Federal Trade Commission has provided a lot of information for we consumers.  Consider the following as it relates to wire transfer scams:

√  Phone call. 
Many wire transfer scams start with a phone call.  Examples of these types of phone calls include someone pretending to be a relative, representative of a company claiming you’ve won a prize, or even pitching a business opportunity.  These are ALL red flags!  In other words, someone is trying to separate you from your money.

√  Know who you’re sending money to.
It makes sense.  Simply never send money to someone you don’t know! The FTC stresses that consumers need to “Stop, Think” and make certain you know who you are sending money to.

√  Typical money transfer scams.
The FTC has provided a list of the typical money transfer scams consumers need to be on guard.  These include:  Grandparent scam, Prize promotion scam, Counterfeit check scam, Mystery Shopper scam, Advance Fee scams, Apartment Rental scams, etc.  The FTC links below provide you more details about what these scams are and how to avoid them.

We are providing you a place to start to ramp up your know how about avoiding wire transfer fraud.  I highly encourage you to review the Tips to Read, Homework, and read the article in our Endnotes.  Once you have done so, you will have a good understanding of this topic to avoid this particular scam.

When you have completed reviewing all the elements of today’s Post, please share it in your social media and with the seniors in your life.  By sharing this important information we can help all of us avoid being a victim of the money transfer or wire transfer scams.

Tips to Read:

Here are several videos from the Federal Trade Commission you should watch.  These cover various situations that scammers use to affect a money transfer scam.

Money Wiring Scams – David Vladeck, Director, Federal Trade Commission (4:53)
Money Wiring Scams – General overview video (1:30)

You should also review the FTC article Using Money Transfer Services, which will provide you some additional best practices and scams to avoid.


Take a few moments to browse our Scams section in our Fraud category for related fraud and scam issues to avoid as a consumer.


Wire Transfers Explained, by Spencer Tierney, NerdWallet, December 2, 2016

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Category: Fraud, Money Tips on the Web, Scams

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