Be Aware, Email Based Wire Fraud Is On The Rise

Diane M. Currie

The FBI and FINRA have recently issued alerts about the rise in email-based scams that request advisers to wire client funds.

The alerts warn that scammers are hacking into email accounts to gain access to personal information. The scammers have become more sophisticated, than in the past. They study the tone and style of the intended victim’s emails, look for personal information, such as account numbers and signature blocks, and then send phony emails to the victim’s financial contacts.

Over the past few months, our clients have shared the following real-life scenarios:

  • Adviser receives an urgent email request for funds to purchase a condo inFlorida. Since the client was planning to purchase a condo in Florida, this request seems legitimate. The introduction in email even matched the familiar greeting between client and adviser of “Hey Buddy.”
  • The “real” client realized that their email was hacked and informed adviser before funds were sent.
  • Adviser receives an urgent request for funds by email with a follow up phone call to adviser’s office.
  • Adviser knows the client well and does not recognize the voice of the caller. Adviser does not send funds, contacts the “real” client and the client’s custodian about the attempted fraud.
  • Adviser receives an urgent email request for funds that states the client is traveling and will not be available by phone. Client will sign any required documents the next day, but money must be sent today. Since client travels often, the request seems appropriate.
  • Adviser sends funds and learns later that the request was not legitimate.