Wire and EFT Fraud: The Rising Cost of Trust Exploited

Wire and electronic funds transfer (EFT) fraud has become one of the most financially devastating threats in banking today. Fueled by sophisticated social engineering and the rise of Business Email Compromise (BEC), these attacks exploit the weakest point in many payment processes: trust.

How BEC Became a Billion-Dollar Threat

BEC has evolved from simple phishing scams into highly targeted fraud operations. In many cases, a criminal impersonates a trusted party—such as a vendor, title agent or executive—using a convincing email address or spoofed phone call. The message is urgent, the request seems reasonable and the stakes are high. Without proper verification, the result is all too common: a wire transfer sent directly to a fraudster’s account.

The FBI reports that BEC schemes resulted in nearly $2.9 billion in reported losses in 2023 alone. These scams are no longer limited to corporate finance teams. Criminals now target a wide range of entities, including real estate professionals, law firms, non-profits and even individuals closing on homes or sending tuition payments.

Wire fraud is particularly damaging because once funds are sent, especially to accounts overseas, there is usually little chance of recovery.

Social Engineering Meets Digital Exploits

What makes wire fraud so difficult to detect is that the transaction appears legitimate from the bank’s perspective. The request is authenticated using standard processes, and the customer appears to be initiating the transaction willingly. Traditional fraud detection systems, which flag unauthorized or anomalous behavior, often miss these cases entirely.

Fraudsters don’t just rely on spoofed emails anymore. Increasingly, they reinforce their scams with follow-up phone calls, often using caller ID spoofing to mimic a trusted number, or intercept genuine email threads through account compromise. Some schemes involve months of reconnaissance to time the fraud perfectly, striking when key personnel are out of the office or during high-volume transaction periods.

From the customer’s point of view, everything feels authentic. From the bank’s view, the transaction checks all boxes.

Warning Signs and Risk Indicators

Although the requests look legitimate, there are subtle indicators that financial institutions and businesses can watch for. A last-minute change in payment instructions, an unfamiliar beneficiary account or sudden urgency from a usually methodical client may all be red flags.

Still, these signs often require contextual understanding that goes beyond rule-based monitoring. This is where behavioral analytics and machine learning play a vital role—identifying subtle shifts in behavior, communication tone or transaction timing that may suggest fraud.

A Coordinated Regulatory Response

To address the growing impact of wire and EFT fraud, regulatory bodies and law enforcement agencies have issued detailed advisories and enhanced guidance. FinCEN has released multiple updates on email compromise fraud, offering red flag indicators and SAR filing recommendations to support faster law enforcement action.

The FBI’s Internet Crime Complaint Center (IC3) has created a Recovery Asset Team to coordinate with banks and quickly attempt to freeze funds. In some cases, rapid reporting within 24–48 hours has led to successful recovery. In most instances, delayed detection results in permanent loss.

Industry organizations have also stepped in. Banking consortiums now encourage information sharing across institutions under safe harbor provisions to disrupt BEC networks, while new fraud prevention frameworks emphasize collaborative defense strategies.

Fighting Back with Proactive Controls

Preventing wire fraud requires a shift in mindset—from verifying transactions to verifying the context around them. Strong internal controls, especially in high-risk departments like accounts payable or real estate settlement, are critical. As is customer education, especially for small and mid-sized businesses, that may lack robust fraud prevention resources.

Banks can also implement real-time monitoring systems that assess not just transaction content, but also the behavioral signals surrounding a request. Combined with automated SAR workflows and dynamic risk scoring, these tools help identify patterns that static systems miss.

Institutions should encourage all clients to validate payment instructions via out-of-band channels, like phone calls to verified numbers, especially when dealing with new or changed wire instructions. These small steps can prevent large losses.

NICE Actimize: Helping Financial Institutions Detect BEC and Wire Fraud Early

NICE Actimize offers advanced fraud detection solutions that empower institutions to identify and prevent wire and EFT fraud, including BEC-driven scams. Our solutions use AI-powered analytics to detect deviations from known customer behavior, analyze patterns across channels, and flag high-risk transactions for immediate review. With built-in SAR integration and strong audit trails, institutions can respond quickly and meet regulatory expectations.