Bank wire transfers are fast and final, making them an appealing target for scammers. A Harvard University faculty member learned that the hard way.
Christine Lu recently fell victim to a scam and lost her entire life savings.
“I was paralyzed for a while,” said Lu. “I was totally shocked. I felt very hopeless. I cried every day for almost six weeks or more.”
With her mother by her side, Lu has been trying to come to grips with losing her nest egg.
“It was a total of six wire transfers over four days, and a total amount over $200,000,” said Lu.
She doesn’t typically answer calls from unknown numbers, but in February, a persistent caller got her to pick up. The number was spoofed to look like it was coming from the Massachusetts State Police. The caller claimed her identity was stolen and that he had a warrant number and case number.
“I was under the impression that if I don’t cooperate my welfare would be in danger,” said Lu.
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She says they told her that the only way of keeping her money safe was to wire it to them, while they issued her a new social security number. She did, and her money disappeared. Lu says she’s mad at herself and at her bank.
Police handling her case would not let her disclose the bank name.
“The wire transfers, six of them over four days is abnormal, and they all went to new recipients,” said Lu. “Any kind of minimum red flag system would have been able to pick up something like this as suspicious.”
Bank tellers did ask Lu why she was transferring the money. She says she told them “family support,” as she was instructed to do by the scammer.
Jon Skarin with the Massachusetts Banker’s Association says somebody at the bank could have possibly flagged this as suspicious. He says bank employees are trained to recognize suspicious financial transactions, and they do frequently stop them, but it can be a tricky situation.
“If the customer didn’t give the bank accurate information as to why they were doing this, it is ultimately the customer’s money and their decision as to whether or not they want to initiate a particular transaction, and the banks have to be careful that they aren’t doing something that could negatively impact the consumer if the transaction is legitimate,” said Skarin.
There are state and federal consumer protections in place for debit and electronic transactions, but none for wire transfers. Because Lu initiated the wire transfers, she says she was not able to even file a claim with her bank’s fraud department.
“It’s beyond the point of disappointment,” said Lu. “It’s disheartening what the current banking regulation is in terms of consumer protection and in terms of their current procedures for protecting consumers.”
Police are hopeful that they will recover a small portion of Lu’s money, but in most cases, wire transfers cannot be reversed. You should never send money to an unknown party. If you are contacted by unknown individuals who threaten your safety, the safety of your family members, or your financial accounts, find the number for your local police and call them directly.