Wiring Money Is A Ripoff Red Flag

One good way to get ripped off in a transaction is to agree to wire the other person money. Whether it’s through your bank, money order, or Western Union, wiring money has zero protections against loss. Which is why con artists love it dearly.

Once the money is wired, it’s nearly impossible to reverse or to trace who picked up the money. I think people have a misperception that Western Union, because it’s retail comes in friendly yellow branding, will have some sort of safeguards. Not so. Once that money is picked up, it’s gone.

Transactions where the other person insists on you wiring them money in advance could very well likely be scams. Transactions where the other person insists on you wiring them money in advance and then they’re going to send some back to you for some cockamamie reason are definitely scams.

Putting a Lid on International Scams: 10 Tips for Being a Canny Consumer [FTC]

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  1. sirwired says:

    And don’t forget the related scam involving you receiving money (via a [counterfeit] check, [stolen] credit card, [hacked] paypal, whatever…) and then wiring money to somebody else.

    • Loias supports harsher punishments against corporations says:

      Any exchange of money is a scam. I.E. I’ll give you this $3000 check. Please cash it and send back $1000.”
      I really hope one day we no longer have to warn people about this kind of scam. It’s so commonsense, but people still fall for it. I hope someday society will be smart enough to only fall for the really good scams.

      • Keavy_Rain says:

        Amway still exists and there are numerous companies out there that operate in a similar fashion.

        If we can’t educate people to the point where they don’t buy into crap like that, how are we ever going to get people to stop falling for all those other scams?

      • nbs2 says:

        The trouble, there are minor situations where it isn’t a scam. Check cashing fees are just a simple variation on the Nigerian scam, but they are legal. I need $100, the check casher wants a $5 fee, so I write the check for $105.

        Or, as I had to do when I was in Europe and found myself suddenly short on cash in the bank, I offered to use my cc to pay for things for people in exchange for the cash they would have spent. I would offer to take a little less than full value. Some would take me up on that deal, others would take the discount.

  2. TheDoctor says:

    But the nice Nigerian prince needed money right now!

  3. SkokieGuy says:

    Of course financial reform and the new consumer protection agency COULD create regulations that require a traceable, reversible system for wire transfers.

    Of course Western Union and others who provide wire transfers could, on its own, offer these types of safeguards. What a wonderful marketing distinction that could promote over competitors. But that would seriously cut into the scam transactions which still generate service fees.

    Facilitate criminal enterprise
    Generate fees
    Profit!

    • voogru says:

      With that logic, computer manufacturers should also be on the hook, because computers can be used for fraud too…

      What we should really be looking at is all of those charities that donate/sell these computers to third world countries, who then go and use them to commit fraud against us.

      Or, we can just blame the actual criminal, the scammer

      • SkokieGuy says:

        Yes, you’re right, I completely reverse my position. And of course you support removing the $50 liability cap on fraudulent credit card transactions, because it’s the scammer’s fault, not the credit card company, right?

        Shall we also eliminate the right to chargebacks, since the problem is the merchant, not the credit card?

    • EarlNowak says:

      Wire transfers aren’t designed for consumers. They’re designed for buyers of commercial goods who have other methods to get the money back. If you live in california and you’re buying 10,000 widgets from a factory in akron, you wire out the money with the full knowledge that if there’s a problem, you’ll have to resolve the problem through the courts. The factory can buy what they need to produce goods knowing that there’s no threat of payment reversal, as long as they perform on the contract. The Uniform Commercial Code article 4A covers wire transfers, and it’s explicit- the whole point of a wire is that it’s instant and irreversable.

      • dpeters11 says:

        I’m not thinking many use Western Union for that. They go through their bank and wire the money. Western Union makes themselves more geared to consumer level.

        • FatLynn says:

          I once wired a mortgage payment via Western Union. I also had emergency money wired to me in another country. It is just fine if you use it properly.

      • sonneillon says:

        Not really. You tell the widget company that they are going to give you 45 days worth of credit or you’ll find another widget company that will give you a line of credit. Then you inspect the widgets and make sure that your order is correct wait till day 40 and mail them a check from an international bank. If your company doesn’t have any credit you can get the bank to ask as an escrow which is still cheaper and better protected than wiring the money.

      • catastrophegirl chooses not to fly says:

        i vaguely recall advertisements from my childhood that showed western union as being the method of choice for parents sending money to their destitute college students who blew all their allowance at the beginning of the semester and now need food money TODAY instead of next week when the check arrives.
        that was a time when banks were usually local, electronic banking didn’t exist and college students were too high risk to give credit cards to.

  4. PupJet says:

    My parents wired me $400 for a car repair…she had to pay $25 to wire it and my bank charged me $10 for getting it! It’s a huge rip off. I told her next time to just send me a money order or, since my credit card is joint with her, to just put it on the card and save $32 (my card charges $3 to add money)

    • racshot65 says:

      Transferring those bits are expensive !

    • lordargent says:

      my card charges $3 to add money

      Wow, what a scam.

    • psm321 says:

      Why not have a credit card that your parents can pay off for you, or a joint bank account?

    • jamar0303 says:

      I’ve never really understood why wires were so darn expensive. The only exception I’ve seen is when I get money wired to my Chinese bank account (Bank of East Asia) from America (Bank of America). It seems to cost nearly nothing for both parties (a $500 wire gets nothing taken from it, a $4500 wire gets $10 taken from it- fairly reasonable).

  5. np206100 says:

    Some companies will give you a discount to wire money instead of paying by credit card. Blue Nile for example, clearly it is not a scam (unless you count buying any jewelry as a scam….)

  6. APFPilot says:

    Keep in mind that not all wire transfers are bad. I work in sales and do millions of dollars of wire transfers day with major companies to pay for things.

    • savvy9999 says:

      I think the primary fraud issue is *consumer* wiring of funds (C2C or C2shadyB), not B2B.

      nobody is claiming anywhere that Wells Fargo’s connection to the Federal Reserve (and vice versa) is wonky.

    • econobiker says:

      That is usually bank to bank wire transfers not US consumer to some small Nigerian Western Union office.

      Death to 419 Scammers- let me say ebolamonkeyman.com forever- scam baiting at it’s best!!!!!

  7. Engine-B says:

    I found the perfect apartment on Craigslist prior to my last move. We emailed back and forth about the details and everything seemed legit until they told be to pay the security deposit via wire transfer. It was very clear after they mentioned wire transfer that I was dealing with a Craigslist scammer.

    • econobiker says:

      Craigslist + rental + non-resident landlord = scam.

      At least a local real estate agent could show the apartment or house.

    • jessjj347 says:

      People also try to “rent” from you by sending a check for more money than rent and asking to wire the change.

  8. brinks says:

    But what about all those job offers I get that promise me I can make thousands a week for just a few hours of work by cashing checks and then money out of my personal account to their overseas clients? There’s NO WAY that could be a scam.

  9. EarlNowak says:

    Wire transfers are not for consumers. They are instant and irreversable, and that’s by design.

    If you live in california and you’re buying 10,000 widgets from a factory in akron, you wire out the money with the full knowledge that if there’s a problem, you’ll have to resolve the problem through the courts. The factory can buy what they need to produce goods knowing that there’s no threat of payment reversal, as long as they perform on the contract.

    On the other hand, I tell people who are selling big ticket items to accept wire transfers almost exclusively. If you’re selling a car or a motorcycle, ask for a wire- it’s safer than carrying around cash and can’t be reversed or forged like a check/certified check/money order. Once that money clears your account, it’s yours.

    • El_Red says:

      It is for consumers, in cases where you need to wire money to a family member… Anything else should be B to B transactions.

  10. OnePumpChump says:

    It’s a great way to buy a car, without having to deal with large amounts of cash or having the seller worry about whether your check is fake.

    It is best done with the seller at your bank with you, and better still if they use the same bank.

    • Nytmare says:

      That sounds like an electronic transfer from an account to another account. Which is different than sending cash to another location, no?

  11. TasteyCat says:

    Don’t know about anybody else, but I have already won several foreign lotteries.

  12. Split Cents says:

    Clerical errors by large corporations are also shockingly common with wire transfer (a typo that adds an extra zero can be pretty shocking). Of course, if Giant company X accidentally sends Y an extra $100 million, chances are it’ll get worked out between the two of them. Consumers that wire away money to Nigeria can’t expect the same courtesy!

  13. El-Brucio says:

    A friend of mine was in need of some cash so I wired him some using Western Union. The service worked fine, but they also required my phone number before sending the money. A couple of weeks later I experienced an explosion in scammy telemarketing calls from out of state, and they’ve been coming on strong the past couple of years.

    I had the number for over a decade before that without getting any telemarketers beyond local newspapers or charities. I cynically suspect that Western Union sells it’s client lists to organizations that are looking for people who are already willing to wire money out of state.

    • econobiker says:

      “I cynically suspect that Western Union sells it’s client lists to organizations that are looking for people
      who are already willing to wire money out of state.”

      I would think that scammy companies know that people who have used Western Union are more likely to wire money so they purchase WU mail lists. WU is probably glad to sell the info.

  14. FrankReality says:

    I had my Paypal account stolen and the thieves wrote themselves a large charge on my credit card and a Western Union money gram. Both the credit card company and Western Union stopped them on suspicion of being fradulent and called me to confirm the transactions were real or bogus – so these Indian thieves didn’t get a dime. Yes, I was lucky.

    Unfortunately, dealing with the aftermath of the identity theft, took several days to prevent further damage.

  15. Draygonia says:

    People think Western Union is safe? I always thought it was a scam business in itself and I don’t even believe they have checking and savings accounts and that all they do is send money to places and intentionally not track it.

    Just what I thought. I guess it’s a bank though?

  16. Vermifuge says:

    Red flag yes, but not always the case.

    A few years ago i ordered a pice of hardware from china. I could only find one supplier and it involved a western union money transfer to “some guy” in a remote city of China. It wasn’t a large some of money but enough to make me think twice. Well i decided to think of the money as already lost and send it off any way knowing i may never see my product.

    I was pleasantly surprised when my product arrived not even a week later. nicely packaged and exactly what i I had requested.

    The moral of this story? Don’t do it unless you are comfortable loosing whatever amount of money you are sending.

    • jamar0303 says:

      Actually, money transfers are a common way of doing business over in China. Most online payments over there are also glorified wire transfers- you select your product, click “pay”, pick your bank (and hope your bank has agreements with the retailer, though that’s not a problem unless you’re weird and, for example, have your main account at the only Wells Fargo branch in the country; if you do you’ll have to get a secondary account at a locally-owned bank), get hopped over to your bank’s site, type in your online banking info, agree to the transfer, and voila. I’m already used to wire transfers for that kind of stuff in China.

  17. Chip Skylark of Space says:

    I’ve recently became aware that Western Union charges you $5 to wire $50 anywhere in the ______ (country, world, block). Who the hell charges 20% for anything? Who do they think they are? Bank of America?