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Potential Sources of Recovery for Commercial Wire Fraud Transfers

Hackers steal millions from legitimate businesses every year through compromised email accounts, usually through fraudulent bank transfers. If you suspect you've been the victim of wire fraud, you'll need to act quickly to stop payments from going through—and if you can't stop the transaction, you may be able to recover funds through other means.

Ways to Recover Funds Lost Through Fraudulent Wire Transfers

Of course, the person who should be reimbursing you for the loss is the hacker who stole from you. However, recovering the funds directly is a time-sensitive operation. You need to contact your bank immediately to initiate a SWIFT recall on the wire transfer. If your bank cannot stop or reverse the Man Holding Wire Fraud Paperwork transaction, request that they contact the receiving bank right away to freeze the account where the money was deposited.

After you start a SWIFT recall, the FBI can help stop the transaction using a financial fraud kill chain (FFKC). Unfortunately, the FBI will only initiate a FFKC for international wire transfers of $50,000 or more stolen from U.S. bank accounts. Additionally, the fraudulent transfer must have occurred within the last 72 hours for the FFKC to be effective.

If the money has already been withdrawn or transferred from the receiving bank, it may be extremely difficult to track where the funds have gone. If you have no hope of recovering the money from the criminals themselves, you may be able to get reimbursement from:

  • Banks. Banks can be held liable for unauthorized wire transfers from commercial accounts, but only under very specific circumstances. According to the Uniform Commercial Code (UCC), the bank cannot be held responsible for a fraudulent transfer if the bank and the depositor have agreed to use a commercially reasonable security procedure to verify wire transfer requests. If the fraudulent transfer met all of the agreed-upon security measures before sending, the bank will probably not be liable. However, the bank also has a duty to accept payment orders "in good faith," meaning it must have done something wrong or out of the ordinary to be responsible for the loss. Account holders are at a disadvantage in these cases, since a bank that fails in its duty to follow usual protocol or enhanced security procedures is unlikely to share that information with a customer.
  • Third parties. There are typically many different participants involved in large financial transactions. In a real estate transaction, the title company, seller, buyer, or real estate attorney could all be liable for the breach of security that led to the loss. You may be able to file a civil claim for damages against other individuals or corporations whose actions (or lack of action) resulted in the fraudulent transfer. In the example above, the title company may have outdated or ineffective online security protocols, making it much easier for criminals to gain access. The real estate attorney may be liable if someone in the office began sharing confidential information with cybercriminals or failing to detect obvious signs of fraud. A data hosting center could also be held liable if they were aware of a potential breach, but failed to warn their clients about the possibility of a security lapse. Our attorneys can determine who may be held responsible by carefully examining the chain of the transaction.
  • Insurance coverages. There may be many different commercial insurance coverages that provide compensation for fraud, such as enhanced theft policies. As with any claim against an insurer, the insurance company is going to do everything it can to avoid payment for a large loss—so you'll have to make a good case before they pay out. Our attorneys scrutinize these policies and exhaust every possibility to get you reimbursed for wire fraud theft.

Every instance of wire fraud is unique, and will need a thorough investigation of all parties to discover who may have enabled or failed to prevent the crime. In order to aid fraud victims in their recovery efforts, the attorneys at DeLoach, Hofstra & Cavonis, P.A. offer free case evaluations to wire fraud transfer victims. Contact us today to tell us more about your case.

 

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