How to Spot (and Avoid) Money Transfer Scams

Unfortunately, there are those who want to take advantage of money transfer services for unscrupulous purposes.

Xe Consumer

May 25, 2020 7 min read

Online money transfers are a fantastic way to send money quickly, securely, and easily to anyone, anywhere in the world. Unfortunately, there are also those who want to take advantage of these services for unscrupulous purposes.

We’ve previously gone over some of the most prevalent scams online today, as well as the ones that have recently popped up in the wake of the COVID-19 pandemic. Many of those try to get you to give away your password, bank account info, or other sensitive details, but you could receive an odd message asking (or, more likely, demanding) that you make a money transfer for some vague yet apparently urgent purpose.

We want to ensure that your money transfers are as safe and secure as possible. Take a moment to familiarize yourself with the following common money transfer scams, and stick around for some additional tips on steering clear of these scams.

1. Urgent (and odd) requests

You've received an urgent message:

  • One of your loved ones is stranded overseas and needs money to get home.

  • A loved one has been imprisoned, and you need to send money so they’ll be released.

  • You’re apparently guilty of some vague “criminal activity”, and you need to transfer money so you won’t be arrested or imprisoned.

  • Your boss or someone else at your company is away on business, and needs money from you.

The list goes on and on. These messages will all have the same common threads: they claim that something drastic has happened, and you need to transfer money to a certain individual as soon as possible to fix things.

The events listed above could conceivably happen, but if that were the case, you probably wouldn’t be hearing about it from a complete stranger, and quickly sending money to an unverified recipient wouldn’t be the solution. Double-check everything before you transfer.

2. “Accidental” transfers, and sellers who require wire transfers

Let’s explore three scenarios:

  1. Someone you’ve never met transfers you money completely out of the blue. They contact you and let you know that they sent the money to you by mistake, and ask you to send them the same amount back.

  2. You’ve agreed to sell something to an online buyer. They transfer money to you, but it’s more than you agreed upon. They contact you, explain their mistake, and ask that you transfer the difference back to them.

  3. You want to purchase something from an online vendor. They ask that you provide upfront payment, and only accept wire transfers or money orders.

These three scenarios are common scams. If you were to transfer money to them, here’s what would happen:

  1. These phony payments are typically made with a stolen card or other fraudulent means, so they’ll get cancelled on their own, without any money coming into your account. But once you send your own money back, it’s gone.

  2. Similar to the above, the check that the buyer “overpaid” with will likely bounce. Any “differences” you transferred will be coming entirely out of your pocket.

  3. It’s possible that the seller is just more comfortable with a secure wire transfer. But if they insist upon upfront payment and refuse any other form of payment (such as meeting in person, or escrow), they could be planning on taking your money and never providing the item you tried to buy.

3. Phony charities

We’ve mentioned this one before, but it bears repeating, particularly today when so many individuals and organizations are in need of charitable support.

Many charitable organizations will reach out asking for support, but some scammers will also pose as charities and ask for you to transfer money to support their mission.

If you’re not familiar with the organization, do a little research to ensure that they exist and are legitimate. If the message claims to be from a known organization, check with the charity to make sure that this is one of their official communications before sending any money.

4. Surprise, you’ve won a contest or received a job offer—but you need to pay first?

Sound too good to be true? It probably is.

You may receive a message about some “contest” or “drawing” you’ve won. You’re going to get a great prize, but there’s a catch: before you can claim it, you’ll have to transfer a small amount (relative to the grand prize) to cover taxes or processing fees.

Or maybe you saw a posting for a job that sounded great. You’ve been offered the job, but they need you to transfer money over to cover your “supplies” before you can start.

Needless to say, the prize money and the too-good-to-be-true job will disappear after you’ve sent your money.

5. Online relationships

Ever seen an episode of Catfish? Then you’re familiar with these scams, which typically take place on dating websites and apps.

Two people meet online and form a strong bond, but suddenly one of them needs money: often for similar reasons mentioned in the first scam. They’re ill, a loved one is ill, they need to move, or something else has happened that has led them to asking their new friend (who they’ve never met) to transfer them money.

How can I avoid falling victim to money transfer fraud?

You probably noticed some common threads in the examples listed above. When you check your emails or interact with people online, keep an eye out for the following warning signs when someone asks you to transfer money:

  • The call or message comes out of the blue, from someone you’ve never met or worked with in any capacity.

  • The communications claim to be professional but the details aren’t right; this could include spelling and grammar errors, broken links, requiring you to download an unspecified attachment, or an unbranded or incorrect email address (for example, legitimate messages from Amazon would come from an email address, while fraudulent ones might be from

  • The situation is presented as incredibly urgent, and pushes you to transfer money as soon as possible.

  • The situation seems too good to be true, and wouldn’t make sense if you took a few minutes to think about it.

As a final note, we want to leave you with some general best practices to keep yourself and your information safe when transferring money online.

  1. Never transfer money to someone you don’t know. The person contacting you will claim to be legitimate, but if you don’t know them, think twice before sending money to them, and verify their identity before you transfer anything. If someone claims that you need to transfer to their personal bank account for a charitable donation or a hotel stay, confirm with the organization in question before making a transfer. But if a stranger contacts you asking for a money transfer, your best bet is to just ignore them.

  2. Go through official channels. Most charities will allow you to securely make donations on their websites, or will have a set system in place for making donations. Or, if you’re trying to settle a dispute with someone, get in touch with the support staff of the platform you’re using and ask them to help solve the situation.

  3. Double-check everything. Verify the identities of everyone involved before you make a money transfer, and confirm that the situation you’ve been presented with is in fact reality.

  4. Wait. Money transfer scams push you to transfer immediately. Step back to assess the situation and think about whether it makes sense.

  5. **Trust your gut. **If something seems off, it probably is. Slow down, make a few online searches, and get the facts before letting someone push you into making a decision you’re not comfortable with.