Why a wire fraud policy is important, download a sample wire fraud policy template

Introduction

The internet has made it easier than ever before to send and receive money. However, increased access to electronic funds transfer systems also makes it easier for criminals to commit fraud. For example, hackers can steal information from your bank account or credit card accounts with relative ease these days. As a result, you need to be extra careful when sending money electronically. Wire fraud is one of the fastest-growing types of crime in the world right now. To protect yourself against potentially getting involved in wire fraud schemes, there are two basic steps that you can take as outlined below

According to the FBI's Internet Crime Complaint Center (IC3), losses from wire fraud totaled over $3 billion in 2019. This number has only been increasing in recent years, making it more important than ever for businesses to have a wire fraud policy in place to protect themselves and their clients.

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What is wire fraud?

Wire fraud is a serious criminal offense that can result in heavy fines, prison time, and long-term consequences. It is important to know how wire fraud works and what is considered wire fraud so that you can protect yourself from this crime.

In general terms, wire fraud involves using technology or telecommunications devices to commit a fraudulent scheme or scam. This includes things like emailing stolen information from one source to another person; sending emails that contain viruses; hacking into computers to gain access to private data; impersonating others online (i.e., “spoofing”); posting false messages on social media sites like Facebook or Twitter; stealing credit card numbers from online retailers and forwarding them through secure channels before selling them off for profit; and more.

What is a wire fraud policy?

To put it simply, a wire fraud policy is a document that outlines the company's policy on wire fraud. A good example of such a document would include:

a list of prohibited activities, including what constitutes wire fraud and what doesn't (for example, if an employee knows that they are sending money to someone who has been identified as being involved in fraudulent activity)
procedures for reporting suspected illegal activity to the proper authorities (which may be internal or external to your company)
sanctions for engaging in unauthorized transactions or misappropriating funds

Why is a wire fraud policy important?

Having a wire fraud policy and standard operating procedure (SOP) in place can help to prevent wire fraud from occurring in the first place, as well as provide guidance on how to handle it if it does happen. A wire fraud policy is a set of guidelines that outline how a company will handle wire transfers, including the processes and controls in place to prevent fraudulent activity. An SOP is a step-by-step guide that outlines the specific actions that should be taken when a wire transfer is initiated.

A wire fraud policy is an important part of your company's business operations because it helps you protect your company from legal action and prevents both wire fraud and money laundering.

In addition to protecting your business, a wire fraud policy will also help protect your clients from the potential repercussions of committing or being accused of committing wire fraud.

A strong defense against these crimes is extremely important for any business because they can cost thousands in fines and penalties, as well as damage a company's reputation if it becomes associated with them.

How to help your clients avoid wire fraud.

A wire fraud policy is an important step in helping your clients avoid wire fraud, but it's not the only one. Here are a few other things you can do to help them:

Use a wire fraud policy template. A sample wire fraud policy template is available in the download wire fraud policy form below.
Use a third party escrow service. They'll act as intermediaries between buyers and sellers and make sure that both parties have completed their transactions before releasing funds to anyone else involved (such as lawyers).
Use a trusted attorney when dealing with large sums of money or foreign exchanges. You should be able to trust your attorney enough not only to give them access to your client's funds but also enough that they won't steal those funds themselves!

Prevent wire fraud by creating awareness

It’s important that you create a wire fraud policy and educate your employees on the importance of this by sharing examples of how wire fraud has affected companies in the past. You can also use an escrow company or attorney to close transactions, as well as educating your clients on the risks and how to avoid them.

Use secure methods of payment with trusted vendors who have good reputations, encourage your clients to do the same, and recommend a security solution if they don’t already have one in place.