From the Cloud: Deep Insights into Wire Fraud Trends

Latest Data Shows Fraudsters Pushing More Lucrative Scams

March 15, 2023 by Verafin

Payment fraud is a challenge that is pervasive in the financial industry, and a threat to financial institutions of all sizes. As the talk of a liability shift for consumer-related payment fraud gains momentum within regulatory spheres, additional pressure is on the industry to respond.  

In our upcoming Cloud Insights: Wire Fraud Benchmarking Report for Q1 2023, we share attempted wire fraud trends and statistics observed from Verafin Cloud data from Q4 2020 to Q3 2022. This blog describes key highlights from our expert analysis — for more insights, watch our Archived Webinar and download a copy of the full Report

Trending Higher: Wire Fraud Attempts Continue to Rise 

Wire fraud attempts have reached their highest values across our network. In Q3 2022, the value of a typical attempt was $17.35K, up 75.3% compared to Q3 2021. 

Industry Risk as Wire Fraud Values Increase 

From Q3 2021 to Q3 2022, attempted wire fraud against businesses increased in terms of basis points by value and occurrence, with the median value per attempt rising from $26.0K to $35.2K. The Finance and Insurance industry saw 20% of all attempts by occurrence, while attempts against the Professional Services segment accounted for 31.6% of the total value.  

Consumer Wire Fraud a Concern 

The mean and median value of attempted wire fraud against individuals increased from Q3 2021 to Q3 2022, with the median rising from $8.0K to a new high of $13.1K, and the mean seeing a significant increase during this timeframe from $20.3K to $33.2K. This increase was largely driven by criminals increasingly focusing wire fraud attempts against the elderly (people aged 55 or older), who accounted for 73.5% of attempted occurrences and 74.7% of attempted wire fraud value. 

Seniors at the Greatest Risk 

In Q3 2022, people aged 55 or older saw a new high for mean value of attempts ($33.7K) and maintained a considerably high median value for attempts ($14.6K) compared to Q2 2022. Looking further into this group, people aged 65 to 75 saw the most wire fraud attempts by value (32.9%) and occurrence (30.5%). 

Top Destinations for Domestic Wire Fraud  

From Q3 2021 to Q3 2022, the typical value of a wire fraud attempt destined for a location within the United States was $16.4K, up 70.0% from Q3 2021 and to a new high since the start of reporting. In Q3 2022, the top destination states for attempted domestic wire fraud by occurrence and value were California, New York, Florida, and Texas. This should come as no surprise as these are higher population states which provides more opportunity for mule recruitment.  

International Wire Fraud Values Take a Jump 

From Q3 2021 to Q3 2022, the typical value of a wire fraud attempt destined for locations outside the United States was $20.0K, an increase of 78.7%. By occurrence, international wire fraud attempts were most frequently destined for Hong Kong, Mexico or China. By value, the top destinations for wire fraud attempts were Hong Kong, Mexico, and Turkey.  

Consortium Approach Continues to Provide Major Benefits 

As financial institutions face potential liability shifts for payment fraud, consortium data is crucial to effectively combat Authorized Push Payment (APP) fraud scenarios, including Business Email Compromise (BEC) and scams targeting consumers. Leveraging 420 million counterparties in the Cloud, Verafin’s Consortium Analytics provide insight into both the payer and payee for a complete picture of the risk. This unique approach significantly reduces false positive alerts — by an average of 40% — and allow you to decisively stop fraudulent payments and protect your customers from loss. 

With our growing number of customer partners, Verafin continually enhances its ability to identify potential mule accounts and increase the performance of our payment fraud solutions, allowing for more effective fraud prevention before losses are incurred. For more information on our consortium approach to combating payment fraud, download our Product Brochure.  

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 3800 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.