Dr. Linda Eagle of the Edcomm Group Banker’s Academy was recently interviewed by San Francisco’s KGO-TV Consumer Reporter Michael Finney for a 7 On Your Side story exploring the actions wire transfer companies are taking to stop financial scams. With the amount of money appropriated from scams in the US reaching $24 million in 2008, the story reported that many scams are still going unnoticed at money transfer companies across the country.
When an undercover decoy posing as a mystery shopper was not warned about the possibility of being swindled, Dr. Eagle explained how this activity was an obvious tip off. “It is pretty shocking because that is a very, very well known scam. There are some immediate red flags for that,” said Eagle. Money Service Businesses (MSBs) must be on the lookout for Internal Fraud, Deposit Fraud, Identity Theft, Kiting, Phishing, Fraud Against the Elderly, Internet Fraud, Lottery Scams, Check Cashing Scams, Mystery Shopper Schemes and others.
MSB employees must be trained to spot these red flags that could indicate criminal activity:
- A customer provides insufficient and/or suspicious information
- A customer presents different identification each time a transaction is conducted
- An individual or business customer cashes a large number of third-party checks
- An individual or business customer asks to purchase traveler’s checks or money orders in large bulk orders
- Changes in a transaction or in patterns of transactions
- A customer sends or receives frequent or large volumes of wire transfers to and from offshore accounts
- An MSB employee whose lifestyle cannot be supported by his/her salary, which may indicate receipt of tips or bribes
Although consumers would be wise to educate themselves about the warning signs of fraud, there is clearly more that can be done by the money transfer companies to recognize possible scams and alert customers before they are defrauded.