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One of the most popular ways of money transactions nowadays is wire transfer, which is an electronic transfer of funds via a network, and is administered by hundreds of banks and transfers service agencies worldwide.
Wire transfers maintain a fast and secure movement of the money for individualized transmission of funds. Wire transfer became one of the fastest ways of safely transferring funds between people in different geographic locations. Both global and local.
A need for fast and efficient money transfer happened to us at least once in our lifetime. Whether it was travel money or a family emergency, money needs to get quick and safe to a recipient.
Unfortunately, like in any other legal services, fraudsters can use them to prey on unsuspecting people, for facilities that do not exist. Here are some things you should keep an eye on to protect yourself from fraudulent activities.
Things to look for when sending cash quickly
- Transfer fees- fees can vary from a few dollars to a more significant amount, make sure to check in advance how much charge will apply to your transaction.
- Exchange rate- look for a price that is closest to mid-market rate as possible.
- Transfer options- check with your recipient if he needs to pick cash right away or use a bank transfer.
Processing time
Wire transfer is a commonly used way of transferring money since it takes a few minutes to set up and initiate a wire transfer. The local transaction itself can be processed on the same day, while the global ones might require a day or two.
The recipient won`t wait too long to access the transferred funds since the money moves quickly. In other words, there is no bank hold placed on the money sent or received via wire transfer.
Although, it might take several hours for the receiving bank to show the wire proceeds to the recipient`s account, although the money is already at the bank.
Common risks with using wire transfer
- Lottery or prize scams- you are contacted and told that you need to send money to cover processing fees or taxes to claim your prize.
- Employment scams- you are offered a „too good to be true“ job or a work-at-home opportunity, but you need to cover start-up expenses and pay upfront for recruitment fees.
- Emergency scams- scammers claim to be sick, or wrongfully arrested and are urgently in need of money, or impersonate grandchildren of elderly people, in need of money.
- Romance, dating, or relationship scams- when you form an online relationship with someone who is a scammer and dupes you into transferring money to cover an emergency or a visit to meet in person.
Bank wire transfer safety
If you are selling some services or merchandise, for example, wiring money is less risky than a check, because the sender must have a sufficient balance in their account to initiate a wire transfer. Unlike wiring money, check require a lot more processing time and also can bounce back.
This means the recipient can wait several weeks for payment, only to realize the check was wrong. Even so, there are some precautions to consider, and some necessary safety measures to take when receiving or sending wire transfers.
Sending money
The main risk there is sending money. Wire transfer requires sending money from one bank to another, and then to the recipient`s account. For you to have an open account, the law requires proof of identity and some additional information, such as physical address: this way, the lack of anonymity with banks limits fraudsters` ability to perform any malversation.
However, if you send the money to a stranger or a business that pays out the proceeds in cash, it is a lot harder to verify who got the money. It is imperative to have a money transfer with only people you know or trustworthy businesses.
Receiving money
Receiving money via wire transfer is mostly safe. Payments are guaranteed since banks require the sender to have sufficient funds, to proceed with the transfer. Among that, it is more difficult for the sender to withdraw the money after it transfers.
However, fraudsters still have a way of taking advantage of customers by using a reversible payment method. Only doing business with trustworthy people can help you avoid this scenario.
Flagged wire transfers
There are some cases where wire transfer could be flagged and alert officials of possible malversations between sender and recipient.
- Regular, but non-viable transfers
- Large amounts wired by cash business
- Wiring money to non-account holders
- Incoming and outgoing transfers with the same money amount
- Transfers to safe-haven countries.
Follow these steps of precaution to avoid falling into a scam trap involving wire transfers. Send money only to people that you know, or to the business you can trust. Clarify all the requirements before sending money to anyone.
If you are being careful and only deal with trustworthy people, you will have the right kind of experience with wire transfers. Fast, reliable, and most important- safe.