wire transfer fraud - incoming money from international buyers

What are the fraud risks for incoming wire transfers

[Rodney]

We have a customer that wants to pay for goods using a wire transfer instead of a credit card.

We are based in the US (and do not use wire transfers that often).

The buyer is based in France, and says his credit/debit card doesn't allow for transactions that high. He would rather send us a wire transfer directly to our bank for the total amount due.

I know that there's a big worry about sending wire transfers OUT to potential fraudsters (nigerian 419 scams, etc).

What are the potential risks of accepting a wire transfer IN for goods?

What types of things should we clarify with the buyer to make sure everyting is legit?

[killroy]

As I understand it (and my sole experience is with sending and receiving, no details) the Fraud risk for outgoin wires is because there is no fall back. Once the wire is out it's out. The can "request" to have it reversed, but basically your bank will inform you of such a request and ask you if you agree. So once the wire is in your account they can't get it back per force. Best to give your bank a call though.

SN (IANAL)

[Sanenet]

Once the moneys in your account, it can't be taken back out. So you should be fine!

[swones]

I would check with your bank on this. I'm sure I read somewhere a while ago that if the account sending you the money was used fraudlently (i.e. stolen bank account details), then the money CAN be reversed back out of your account. I won't swear to this but please do check with your bank.

Simom.

[jim_w]

We don’t do wire x’fers because I’m too paranoid to give out my main bank account number. Soon I plan to set up another bank account that will be used just for the xfers. This way, no one will have the main bank account number, so in a worse case scenario, they can’t get more than just what is in the new account, which we will keep as close to zero dollars in as possible. I don’t know if that is too extreme or not though.

[diamondgrl]

We give out our bank information to seemingly legitimate customers who request how they can pay but were scolded by a security expert on that practice. I asked the bank about it and they said there was no risk.

I don't know what to think.

[steve]

We are in the UK and operate a B2B site.

Lots of our customers both in the UK and worldwide pay straight into our bank account - touch wood we've never had a problem.

According to our bank once we 'have the benefit of the funds' i.e. they have been in our account for a few days, they cannot be taken back.

If a refund is required we have to do a transfer to the customers bank account.

To be on the safe we do some simple checks before sending the goods - check the company name and address, and ring them back to confirm the goods are being despatched (really to confirm they know about the order) etc.

[steve]

We give out our bank information to seemingly legitimate customers who request how they can pay but were scolded by a security expert on that practice. I asked the bank about it and they said there was no risk

Same here - our bank (HSBC) confirmed there is no way anyone can take money from our account without our permission.

[web_india]

>> The buyer is based in France, and says his credit/debit card doesn't allow for transactions that high. He would rather send us a wire transfer directly to our bank for the total amount due.

On the face of it, looks like a genuine buyer.

also wire tansfer is the best (and the safest) option for receiving international money.

I wish all my clients paid us by wire transfer :-)

[jim_w]

In the US, you can give someone you bank account number over the phone and they can take money from you account. Like the phone company for example. The bank never calls you to confirm you gave them permission. Of course, maybe they have some sort of arrangement with some 3rd party that confirms that they are a big company or something that I don’t know about. When I ask my bank if they would underwrite such transfers, they said no.

Maybe different countries have different laws that govern such transfers.

[jollymcfats]

Anyone with your (USA) account and routing numbers can withdraw money from your account by ACH debit. For personal accounts, this can usually be reversed within 60 days. For business accounts it can be quite different. Wells Fargo, for example, only allows one day before the debit is permanent. Their explanation to me was "It's a business account,and you should be paying attention."

Some banks are offering ACH-filter services to block bogus debits. Similar are anti-check-fraud services, where you give the bank a list of checks you've written and the bank will deny any other incoming checks. With the Check 21 changes there's little difference between checks and ACH debits now.

[diamondgrl]

jollymcfats,

That's rather startling information to me. Why would our bank say otherwise, that it's perfectly safe? And how does one give wire transfer information out other than by giving this information?

[Sanenet]

In Europe thats called "direct debit", whatever you call it in the states. How to set it up varies from country to country - ie, in Spain you need to register as a legitimate services company with the bank before before being able to do it.

It's used to pay your utilities bills. I think most accounts are insured against fraudulant use?

[jollymcfats]

> And how does one give wire transfer information out other than by giving this information?

I believe it's possible to process wires with either account number or beneficiary information- e.g. the name on the account. I've never tried it though.

A Google search for ach fraud will turn up plenty of info on the risks of unauthorized debits.

[Rodney]

We are in the UK and operate a B2B site.

Lots of our customers both in the UK and worldwide pay straight into our bank account - touch wood we've never had a problem.

According to our bank once we 'have the benefit of the funds' i.e. they have been in our account for a few days, they cannot be taken back

Thanks for the help guys!

This is also a B2B site. We've done wire transfers with national vendors before, but this would be our first international wire transfer.

Good to hear that it's often more safe than credit/cheques.

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Re Jim_W, jollymcfats, diamondgrl:

From what I understand, an ACH debit is different than a "wire transfer".

You have to give out different information for an ACH debit, don't you?

[jollymcfats]

> From what I understand, an ACH debit is different than a "wire transfer".

Yes, totally different animals.

> You have to give out different information for an ACH debit, don't you?

Usually not- simple wire transfers are often made using your banks's ABA routing number and your account number, the same information printed on your checks.

I'd suggest calling your bank to find out the correct information you'll need to send to the international folks. If you're concerned about handing out your account number, you might ask if the transfer can be conducted using your account name & bank address rather than account number.

[jim_w]

>>your account name & bank address rather than account number.

I did that and my bank said no, but each bank may be different.

[Faith]

With every cheque you write (in the UK) your bank account details are published right there, on the cheque. The account number and sort code is on top and bottom.

We have a customer in Indonesia who sends us wire transfers, its the only payment method we will accept from that country and it's irrevocable.

I think wire is the safest payment method, even over cash if you consider people forge bank notes! Once that money has cleared into your account it can't be bounced back out again.

[grobe]

You're giving out your account number to everybody you give a check to. So you don't pay anyone by check to prevent this?