One of the most popular areas for payments fraud is wiretransfers. That's partly because criminals have limitless optionsfor perpetrating wire fraud. There are many combinations offraudulent approaches, and various points of compromise—such asmalware transferred from a vendor to a customer, an email misleading an employee, or a call from the CEOrequesting a transfer of funds—all can result in a wire initiationthat transfers funds fraudulently to criminals.

The result can be hugely damaging to the company that thefraudster targets. One recent example occurred when a U.S.-basedescrow firm transmitted fraudulent wire payments to accounts inChina and Russia totaling more than $1 million between December2012 and February 2013. Less than a third of the lost funds wererecovered, and the escrow firm was forced out of business.

Even when a wire fraud scheme doesn't result in significantmonetary losses immediately, the ripple effects can be serious.Costs incurred after a fraudulent wire transfer can includeinvestigation of the crime, remediation for the account holder whosuffered the loss, and litigation. There are also intangible costssuch as eroded brand and reputational value, which can result incustomer attrition—customers or account holders may cut ties withcompanies they do not trust to adequately protect their assets.

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