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From the Cloud: Deep Insights into Wire Fraud Trends


March 2023

Latest data shows fraudsters pushing more lucrative scams

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. 

Verafin’s network of 2,300 financial institutions and their unique Consortium Analytics approach uses the power of 420 million counterparty profiles to improve detection of payment fraud, reduce false positives and provide a complete picture of risk.

Trending Higher: Wire Fraud Attempts Continue to Rise

Wire fraud attempts have reached their highest values across Verafin’s 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 members from loss.

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

About Verafin

Verafin is the industry leader in enterprise financial crime management, providing a cloud-based, secure software platform for fraud detection and management, BSA/AML compliance and management, high-risk customer management and information sharing. More than 1,200 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 reduces false positive alerts, delivers context-rich insights and streamlines BSA/AML compliance processes. Verafin has industry endorsements in 45 states, including the TBA, WBA, FBA, MBA, and CUNA Strategic Services.