Beware Of Online Account Fraud
Fraudulent online account opening followed by electronic or altered check deposits is becoming the new version of the Nigerian 419 scam. An account is opened online and funded with an ACH deposit or wire transfer. The depositor then asks that the funds be wired out, often overseas. One client told me they had three such online fraudulent account openings this month!
If you smell a fraud, immediate action may be required. If your bank receives a request to send a wire transfer and you elect not to send it for any reason, be it fraud, insufficient funds, or even a system breakdown, notify the customer immediately. Immediately means within one hour if you receive a request during normal processing business hours. Although the statute provides that the penalty for the delay is only interest on the amount of the wire until you give notice, there are court decisions that allow additional common-law damage claims by your customer.
Today’s takeaway? So long as you act in good faith, you should immediately notify the customer who wants to send a wire that you are not “accepting” the request and that you have referred it for further investigation. Be especially alert to online account opening fraud. Be doubly alert if the account is funded with a large ACH deposit or wire transfer. Double that if the depositor is from out of state. Then double that again if there is no apparent reason why the depositor chose your bank. And double that again if the depositor wants to move the money out quickly, especially within one monthly banking cycle, and again if the wire is being sent to Cypress, Panama, Beijing, or Moscow. In my 40+ years of doing this, 100% of the transactions that smelled fraudulent, were fraudulent. And remember to file a SAR.