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Fraudsters Focusing on Higher Value Wire Scams

New Cloud Insights Reveal Concerning Trends for Your Customers

January 18, 2023 by Verafin

 Fraudsters Focusing on Higher Value Wire Scams

Payments fraud is an increasingly complex threat to financial institutions and consumers alike. As wire fraud attempts surge against individuals, especially for seniors, there is a growing debate surrounding mandatory victim reimbursements for Authorized Push Payment (APP) fraud. With a potential liability shift on the horizon, Verafin is providing the industry with Payments Fraud solutions that use our Consortium Analytics framework resulting in improved fraud detection and false positive rates for our 2200+ customers.

In our most recent industry report, Cloud Insights: Wire Fraud Benchmarking Report for Q4 2022, we describe attempted wire fraud trends and statistics observed from Verafin Cloud data from Q2 2020 to Q2 2022.

Concerning Trends – Attempted Wire Fraud Value Reaches New High

Emboldened fraudsters may be exploiting the uncertainty of the economic climate to leverage higher value fraud scams. Seen across both consumer and business segments, from Q2 2021 to Q2 2022, the median value of attempted wire fraud reached the highest levels of any reported quarter, rising 50% from $10K to $15K per attempt.

Attempted wire fraudMedian value increased fromQ2 2021 to Q2 2022 by 50%

Top Industry Fraud Target

Finance and Insurance (28%) and Professional Services (11%) were the top two industries for wire fraud occurrences, and Finance and Insurance (37%) and Real Estate (23%) lead by value. Compared to Q2 2021, attempted wire fraud value grew 365% for the Financial and Insurance industry in Q2 2022, and 85% for Real Estate over the same period. The mean and median value for attempted business wire fraud also increased from Q2 2021 to Q2 2022, with the median rising from $27.5K to $35.7K in this period.

Overall Increase in Wire Fraud Value Against Individuals

Fraudsters continue to push for bigger and bigger scams. From Q2 2021 to Q2 2022, the mean and median value of attempted wire fraud against individuals increased, with the median rising from $8.5K to a new high of $10.4K.

Seniors Continue to be Focus for Fraudsters

In Q2 2022, elderly persons (people aged 55 or older) saw the highest median wire fraud value ($15K) since data has been reported, rising 76% over the previous year. Attempted wire fraud broken down by age of payer revealed that people aged 55 or older accounted for 71% of occurrences and 73% of attempted wire fraud value in Q2 2022.

California Scheming

The mean and median value of attempted domestic wire fraud increased from Q2 2021 to Q2 2022, with the median rising from $10K to $14K during this period. In Q2 2022, California was the top destination for both attempted wire fraud by occurrence and value.

California is the top destination for attempted wire fraud by occurrence and value. The Median value ofattempted domestic wire fraud increased from Q2 2021 to Q2 2022 from 10 thousand to 14 thousand dollars.

Wire Fraud Abroad

In Q2 2022, Portugal saw the most international wire fraud attempts by value, while Hong Kong was first by occurrence. The mean and median values of international wire fraud attempts increased considerably from Q2 2021 to Q2 2022, with the median rising from $14.6K to $29.6K.

Consortium Approach Continues to Provide Major Benefits

As financial institutions face potential liability shifts for payments fraud, consortium data is crucial to effectively combat APP fraud scenarios, including Business Email Compromise (BEC) and scams targeting consumers. With our growing number of customer partners, Verafin continually enhances its ability to identify potential mule accounts and increase the performance of our payments fraud solutions, allowing for more effective fraud prevention before losses are incurred. Driven by our consortium approach, our cloud-based evidence explains away significant volumes of false positive alerts, saving time and resources for our financial institution customers.

For further wire fraud statistics, emerging trends, and key insights for your institution, download our Quarterly Cloud Insights: Wire Fraud Benchmarking Report for Q4 2022.

Verafin is the industry leader in enterprise Financial Crime Management solutions, providing a cloud-based, secure software platform for Fraud Detection and Management, BSA/AML Compliance and Management, High-Risk Customer Management and Information Sharing. Over 3500 banks and credit unions use Verafin to effectively fight financial crime and comply with regulations. Leveraging its unique big data intelligence, visual storytelling and collaborative investigation capabilities, Verafin significantly reduces false positive alerts, delivers context-rich insights and streamlines the daunting BSA/AML compliance processes that financial institutions face today.

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