Wire fraud: What it is and how to avoid it

Money By Emily Larson June 14, 2024

Every year, thousands of people lose billions of dollars to wire fraud.

It usually begins with a text, email, or DM from what appears to be a trusted source. They’ll make urgent (and often convincing) requests asking you to wire money or turn over access to your online accounts.

They might say they’re a family member who needs cash for an emergency, or that you won a prize and need to send money to cover taxes or shipping costs before you receive it. But there’s a scammer on the other end of the line. And they have their sights set on your money.

Thankfully, learning about wire fraud and other bank transfer scams is one of the best ways to protect yourself from becoming a victim. But what exactly is wire fraud? What should you do if it happens to you? And what can you do to keep it from happening to you? We’ll answer all these questions and more in this article.

What is wire fraud?

Wire fraud is a type of fraudulent scheme that uses electronic communications to deceive someone into sending money or sensitive information. Wire fraud can take place over any form of electronic media, including email, social media, phone, or text messaging.

Although many believe wire fraud only involves wire transfers, it can also include other bank transfers.

So, what’s the difference between a wire transfer vs. bank transfer?

• A wire transfer is a method of transferring money electronically from one person or entity to another that typically involves using a secure network to transfer funds between banks.
A bank transfer is any method of moving money between bank accounts, including wire transfers. But it also includes electronic funds transfers (EFTs), Automated Clearing House (ACH), and online or mobile transfers.

Note that while the term wire fraud is used to describe a wide range of crimes, the term wire transfer fraud generally describes crimes that specifically involve wire transfers.

The 4 elements of wire fraud

The US Department of Justice Criminal Resource Manual Section 941.18 U.S.C. 1343 defines what the US federal government considers wire fraud. It lists the following as the four definitive elements of wire fraud:

  1. That the defendant voluntarily and intentionally devised or participated in a scheme to defraud another (individual or entity) out of money.
  2. That the defendant did so with the intent to defraud.
  3. That it was reasonably foreseeable that interstate wire communications would be used.
  4. That interstate wire communications were in fact used.

What are examples of wire fraud?

There are many different types of wire fraud. And scammers are always coming up with new tricks. While there are far too many to list here, some of the most common wire fraud examples include:

• Phishing scams – Think of phishing scams like fishing but for your personal information or money. Cybercriminals try to dupe you with emails claiming to be from reputable organizations or fake websites that mimic legitimate ones. Their goal is to trick you into sending them money or providing sensitive information like login credentials.
Internet scams – These are simply fraudulent schemes that happen online. There are thousands of internet scams, but an example might be a supposed seller accepting payment for goods they never deliver. Another could be fake job or training programs that involve wiring money for startup kits or training.
Online buyer scams – These scams exploit online shoppers and sellers. An example might be a “buyer” paying for an item by mailing the seller a counterfeit check for more than the sale price. They’ll then ask the seller to wire them the difference. Before the check bounces, the “buyer” takes off with the money.
Business email compromise (BEC) – In this wire fraud scam, the fraudster sends spoofed emails from a “company executive” instructing a lower-level employee to transfer funds for a seemingly legitimate business purpose.
Ransomware attacks – These attacks involve cybercriminals encrypting a victim’s files and demanding payment (often in cryptocurrency) for the decryption key.
Romance scams – One of the cruelest forms of wire fraud, romance scams involve cybercriminals building online romantic relationships with victims. Their intention? To request money from their victims and pocket it.

What are the penalties for wire fraud?

The penalties for wire fraud vary tremendously across jurisdictions and cases.

In the United States, wire fraud is a federal crime, meaning the federal government can investigate and prosecute it. Because wire fraud is also a crime in all 50 states, state and local governments can prosecute and investigate wire fraud as well.

As we mentioned earlier, the federal wire fraud statute in Title 18, Section 1343 of the United States Code (18 U.S.C. § 1343) defines what constitutes wire fraud in the United States. It also spells out wire fraud penalties.

Within the United States, specific penalties for wire fraud vary depending on the circumstances of the crime, such as the amount of money involved. In fact, the court has significant leeway in what penalties it imposes.

However, the general federal penalties for wire fraud include:

• Federal prison time – Perpetrators of wire fraud may face up to 20 years in federal prison for each count, especially if the fraud involved large sums of money or substantially impacted the victim.
Fines – The courts can fine perpetrators of wire fraud up to $250,000 per count, depending on the circumstances of the crime and the financial losses incurred by the victims.
Restitution – Courts may order perpetrators of wire fraud to pay restitution to their victims to compensate them for financial and other losses.
Forfeiture – Courts can order the forfeiture of any assets or property gained through illegal activities.

Can I get my money back if I’m a victim of wire fraud?

It is possible to get your money back if you’re the victim of wire fraud, and many victims do. However, it can be challenging. Here are some steps you can take to boost the odds of getting your money back:

Try contacting the company you used to wire the money and ask them for a reversal of the fraudulent transaction.
If you sent the money through your bank, contact them immediately to see if they can reverse the transfer.
Report the fraud to your local law enforcement agency and the Federal Trade Commission (FTC) if you’re in the United States.
If you’re in the United States, file a complaint with the Internet Crime Complaint Center (IC3).
Consult legal professionals to explore possible legal actions against the fraudsters.
Review your insurance policies, especially your homeowners insurance, to see if they cover financial losses due to fraud.

How to protect yourself from wire fraud

Because there are so many types of wire fraud and scammers are always scheming new tricks, there’s no single thing you can do to protect yourself. Keeping your money and personal information safe requires a combination of awareness and vigilance.

Here are some of the most useful tips to protect yourself from wire fraud.

Educate yourself

The first step in protecting yourself from wire fraud is to learn about common schemes and tactics. Learn how different types of scams work and how to recognize the signs of scams. If you have a business, train your employees to do the same.

Look out for phishing attempts

Always be cautious of emails, messages, calls, or websites requesting personal or financial information, especially if they ask you for login credentials. Legitimate companies won’t ask for them.

Be skeptical even if you think you’ve received emails from the same sender before. Always verify the legitimacy of all requests for personal or financial information before responding. And double-check the sender’s email address and any hyperlink URLs for slight misspellings or differences. If they’re off, that could indicate a scammer’s trying to mimic an official site in hopes of stealing your personal information.

Verify email addresses

Double-check—maybe even triple-check—the sender’s email address, especially if it involves financial transactions. Look closely for slight variations or misspellings, which could indicate a scammer is trying to misrepresent their identity. More tips for vetting email addresses include:
Be wary of addresses from public sites like Gmail, Yahoo, or Outlook instead of official company domains.
 Copy and paste the email address into a search engine to see if it’s linked to known scams.
If something seems off, contact the company directly to verify the email’s authenticity.

Create strong passwords

Create strong passwords for your email, banking, and other online accounts. These passwords shouldn’t include easy-to-guess information like the four digits of your birthday or a number sequence like 1234.

Here are some tips for strong passwords:

Use at least 12 characters.
Combine letters, numbers, and symbols.
Avoid dictionary words, phrases, dates, and number sequences.
Use a unique password for every account.
Regularly update passwords.
Use two-factor authentication (2FA)
Periodically check for breaches.

Secure your devices

One of the best ways to prevent wire fraud and other cybercrimes is to properly secure your electronic devices, including laptops, desktops, mobile phones, video game consoles, and tablets. Use passwords, PINs, or biometric features to lock your devices, and require two-factor authentication (2FA) to unlock them. Also, keep them up to date with the latest security patches.

Be skeptical of urgent requests

Creating a sense of urgency is one of the most common strategies scammers use. They hope their urgency rushes you into a quick decision. After all, if you’re rushed, you’re less likely to be skeptical of the request. They want you to act from a place of pure emotion and disregard red flags or potential consequences.

If you receive an unexpected or urgent request for a wire transfer, independently verify the request before taking any action.

Monitor your accounts

Although learning of unauthorized or suspicious transactions is never ideal, it’s far better to catch them early. This helps minimize your losses and maximize the chances you get your money back. Regularly review your bank and credit card activity for unauthorized or suspicious transactions. Be sure to opt in to real-time transaction alerts on any accounts that offer them.

Check website security

Make sure every website you use for financial transactions has “https://” in the URL, which indicates the site has a secure connection.

If you’re looking for a secure website to send money online, you’ve come to the right place. Western Union takes every reasonable precaution to keep you, your personal information, and your money protected.


What is the definition of wire fraud under the law?

In the US, wire fraud is a scheme to defraud someone of money or property using electronic communication.

What is the minimum sentence for wire fraud?

There is no wire fraud minimum sentence.

What is the statute of limitations for prosecuting wire fraud cases?

In most cases in the US, the wire fraud statute of limitations is five years from the date of the crime, meaning that the government must bring charges within five years. However, a number of exceptions can extend this period.

What factors are considered when determining the penalty for wire fraud?

Some factors that determine the penalty for wire fraud include:

• The amount of money involved – More money generally equals a more severe sentence.
• Impact – Courts generally issue harsher sentences if victims experience several financial or emotional harm. They might also face stronger penalties if they target vulnerable populations such as older adults.
Criminal history – Scammers with prior convictions may face harsher sentences.
Premeditation – Complex schemes that require more planning might mean more severe penalties.

What is wire fraud conspiracy?

Wire fraud conspiracy is a scheme to defraud that is shared by two or more individuals or entities.