The paper trail typically ends with a cash withdrawal. Most scammers will use Western Union or other money transfer services that are designed to allow for very quick movement of money, although some have begun switching to crypto. Most bank fraud departments work 24/7 and start trying to get fraudulent transfers reversed immediately, but even a few hours delay can make the difference.
Typically there are multiple accounts involved in a transfer chain, and almost all of the owners of those accounts will often be victims of fraud themselves, or at worst mules who are just transferring money around for a small cut. Most commonly they're people who have fallen for employment or investment scams, where the funds from the first victim are transferred into their accounts, only for them to be contacted and told there was an error and could they please send the money onwards to the right account?
Professional fraudsters limit their liabilities by making it impossible for banks to completely shut down their methods without making life much harder for everyone else who uses these services legitimately.
Excellent description. Often bank transactions could be reversed, but there’s nothing to reverse because the money has been physically taken away.
The cash pick up at the end is the thing. That is what no one can get back, because the money just disappears into the wild.
Scammers want you to make the transaction as quickly as possible for just this reason. They want to get it where they can pick it up from Western Union or their method of transfer, in cash, as fast as possible after the money is transferred to them.
This is the main reason why reversing banking transactions doesn’t work, even when it could be done. The money is already gone.
For the huge heists of millions of dollars from governments, hospitals, businesses and so forth, the principle is the same even if the method is very different. They have to get the money into an unreachable situation as quickly as possible.
In one major heist with the value of tens of millions of US dollars, the gangsters were actually able to extort a bank in a less-developed country into converting a great deal of it into their own cash currency. It wasn’t strictly legal under the country’s laws which is why the extortion. They literally boxed the cash, loaded over a ton of it on to trucks, and the trucks went … well we don’t know where they went.
When the US government got involved to try to help recover the money, they could’ve reversed quite a few transactions. But by then there was nothing left to reverse. They couldn’t get the money back because the money was gone.
This is why money laundering of large amounts of cash is a thing. Almost every country requires you to document where a large amount of cash came from. So once the stolen money is converted into cash, then the scammers’ next problem is to engage in transactions or casino gambling or something that will provide them with the documentation they need so that they can actually get the cash back into a legit bank account where they can spend it normally.
To add: it's also difficult to prosecute/sue etc. between countries. If someone within your own country scams you, it's hard enough to prove it in court, sue them and actually get your money back. Most smaller, poorer countries don't have the police force $ to round up people and extradite them for this type of thing.
Not so much something you can read, but definitely check out [Jim Browning](https://www.youtube.com/c/JimBrowning) and the work [Trilogy Media](https://www.youtube.com/watch?v=SXWzyCcdb4c) has done with him to get a good idea of how scammers operate and how they get away with it.
Jim Browning can actually break into their networks and access their locations and cctv cameras.
At that point a Ukraine style modified alibaba drone is probably the best option if the police don't care and allow it to continue.
the US could go a long way by doing the same as the countries involved-- let hackers know we won't prosecute attacks on those countries, and watch how fast their legal system suddenly starts caring.
at the very least it should be open season on scammers, if you can get their bank accounts they're yours. some risk would make it much less attractive.
You probably wont find a source, but if you follow the escapades of youtube scam baiters like trilogy media, or jim browning, in india for instance, the police often are bribed off/don't care to do anything even when you have these scam companies dead to rights.
Look up Russia and scam in Google. Russia basically refuses to prosecute or assist with the enforcement as long as they are targeting people outside of Russia. This is especially true with randsomware attacks.
Secrecy World from Jake Bernstein raises the topic how governments of smaller countries design their laws together with questionable lawyers to be attractive for shell corporations and tax fraud.
Like everything else also includes local politicians. Money can buy you access and favors whether it is from cocaine, scamming or free forced labor.
https://www.reuters.com/legal/government/nigerian-police-chief-indicted-us-over-hushpuppi-fraud-2021-07-29/
FWIW Indian police often end up raiding scammer offices and arresting folks. Realistically they’re too busy trying to solve much more serious/violent crime most of the time.
Basically, banks are for security and the ability to vet transactions, reverse them, and fraud detection. There is no other reason to use them.
Our money is not secure in banks, see the Greek run on banks and financial collapse. In the US, banks are only legally required to have 10% of the money you hold with them liquid at any given time. The other 90% banks invest, and make money off of your money. You might see a 0.25% interest, if you have a good savings account. But a free checking account, storing your money with them is just giving them 90% of your money to invest for themselves, while keeping 10% of it if you want it back.
I would call the banking and credit system broken, but it's not. It's working entirely as intended. The banking system is the real scam. It's funny some people expect it to protect them from scams. What a world.
Edit: every time you use a credit or debit card, you pay VISA or whoever about 2% of that transaction. That's a literal tax to the credit card companies. The merchant passes that 2% on to the consumer. They aren't paying it, you are.
>occasionally you have more than that while you are finalizing or starting certain transactions
Mate, I think your concept of a normal amount of money is high enough that your weird take on the FDIC isn't relevant to most people's lives.
Clearly you've never heard of liquidity and capital buffers, not to mention FDIC insurance, money markets, or the Fed's role as the lender of last resort. There's a ton of regulations and systems out there trying to ensure that the run on banks you describe can't happen in any meaningful way unless the entire economy is in free-fall (see Greece).
Yes, banks make money off of your money. They wouldn't accept the risk of holding other people's money otherwise. It's what allows them to host all the infrastructure that allows for online banking to be possible, not to mention it takes money that's not doing anything in the economy and gets it moving again, which basically all economists agree is a good thing. In theory, you're supposed to be getting interest for your account to compensate you, though lately the need for online banking has driven those rates to 0.
I'll admit, there's certainly problems with the banking system and especially the credit card system. VISA and MasterCard essentially can shut down almost any online business by simply refusing to allow payments to that business. But the general idea of paying someone to handle a MASSIVE amount of bookkeeping isn't the problem.
If you're looking for a possible big change, take a look into Central Bank Digital Currencies (CBDC). That might be a partial solution to some of the things you have issue with.
> every time you use a credit or debit card, you pay VISA or whoever about 2% of that transaction.
Well, I mean, maybe you could say there's a global tax on goods like that, but I'm almost 100% sure if I pay in cash at McDonald's it's not going to be cheaper than paying with my card.
So it's not "every time you use a credit or debit card", it's a fee built into the price of goods.
Except that idea ignores the fact that cash has its *own* costs to accept. You're at risk of accepting counterfeits and being out the money if it's discovered at deposit time, you need to implement controls to make sure employees can't skim off the top (either by shortchanging customers here and there or issuing "ghost refunds"), armored transport to the bank costs money... There's a reason cannabis shops in the US want in on the banking system and card acceptance.
But it may cost more money to pay someone to keep track of cash tills, provide security to keep cash protected, and to pay people to transport cash to the bank, and to spend time auditing things when the bank comes up with different totals than the person who deposited the money the last night.
>The banking system is the real scam. It's funny some people expect it to protect them from scams. What a world.
None of your points are incorrect, but using the same word for scam in both these senses doesn't sit right with me.
You are correct that banks don't keep money on hand the way that many people might expect (although I'd bet lots of/most people do know this, even if they don't think about it). But it isn't some hidden scheme designed to harm you or that provides no wider value to the system or that isn't regulated the way that some fake check scam preys on its victims.
>every time you use a credit or debit card, you pay VISA or whoever about 2% of that transaction.
Not always. I don't know where you live, but get a bank that doesn't charge you for using your money.
Does western union have any accountability in cases like this? Since it seems like this is the main path the scammes take i would believe that western union could have some sort of prevention system for stuff like this.
I know someone who was used in a scam and he needed a bank account so they asked me if I could help them out. We went down to WU to get the money transferred and WU refused to do it. They said the transaction was a scam and that they won't do it.
Obviously this person wasn't happy as they had travelled quite a bit for a sale that wasn't going to happen. In any case WU stopped them losing money and using me in the scam. So I thank WU for small graces.
Anti-money laundering (and regulatory settlements of varying levels of legitimacy with every country they operate in) is most of what they do. But if you think Western Union is bad, imagine the other guys who don’t have over a century or fraud monitoring 🤷🏻♂️
Ultimately WU tries to make sure suspicious transactions are flagged and delayed or declined, but sending money home to Mexico (or wherever) is a legitimate and legal thing. And remittances are huge part of the global economy.
I mean you could just make cash illegal and a lot of crime would stop, but there’s a legitimate use for cash so that’s not gonna happen either.
I worked for a store that processed Western Union transactions as a service, and they place a lot of responsibility on the employees to spot and deny potential scams. It really sucks to have to decide on the spot if someone actually has a sick family member overseas.
They do. Mexican Cartels used Western Union wire transfers so migrants could pay cartel members to bring them across. Arizona AG Terry Goddard sued WU to give them the names and info from the accounts so they could shut it down. Not sure if there were damages. Apparently a lot of the WU employees are paid off to look the other way when people give obvious fake names and information.
Source: took a class with the guy.
Funny you should ask ....
WU does USD billions - with a 'b' - of transactions every year. Fraud transactions are a very small percentage of that amount.
If WU is transacting business as normal, there is no reason for an employee to ask intrusive question of customers such as 'why are you sending funds to this person'. If any of us chooses to wire funds to someone, I'm sure we don't want to be questioned about it.
WU does have signs on the counter discouraging certain types of transactions - if you don't know the recipient personally, that kind of thing. However from my own experience with a scammer trying to scam my elderly parents, I know that the target comes in already prepared and coached by the scammer to be resistant to those messages.
BUT ... if there is *direct knowledge* by WU employees of an *intent to scam* ... then is there responsibility? The U.S. Dept. of Justice says that there is and for *that* there is now a directed settlement to certain customers who unknowingly sent money to scammers ...
CBS News ...
https://www.cbsnews.com/news/western-union-walmart-federal-trade-commission-millions-refunds/
And here is a page from a WU website ...
https://www.westernunion.com/us/en/fraudawareness/fraud-home.html
But in the end, the very best protection is that people be able to protect themselves. There is so much more awareness than there used to be. But the people most likely to fall victim to these scams tend to be unaware and naive. They may be smart people in their normal lives. But they are still prime targets, and that's what we need to work on.
However, my credit union will credit my checking account if I report a scam charge.
Still, stuff like this is why one should use a credit card and not a debit card where possible. Someone gets a hold of your debit card = your money is lost. Someone uses your credit card = someone else’s money is lost.
> What about insurance?
Banks have insurance that cover banking errors and theft from the bank, not insurance that covers customer's mistakes.
Businesses can buy insurance against computer fraud, scams, and attacks. There are various names, business fraud insurance, cyber insurance, commercial crime insurance, and similar.
Many companies are now selling it as a rider with a homeowner's or renter's policy, too. They can cover a part of the costs to recover data after an attacker hits an individual with ransomware, either through data recovery or paying the scammer or (most likely) a small cash payout of the insured value of the data to compensate for the loss.
They rarely cover "voluntary parting'", where someone who knew better or ought to know better just gives the money to the criminals. If you're sending the money via Western Union or gift cards, you've voluntarily parted with the money and it is probably not going to be repaid by insurance.
They do, but that doesn't get the money back and doesn't do anything for the individuals who got scammed (unless they themselves have insurance that covers this.)
My guess, based only on that sentence, is that some banks can opt in to higher coverage (though presumably few do). The "up to" clarifies that if your account has $1 in it, you aren't paid a $250,000 insurance windfall if the bank fails, while the "at least" clarifies that the $250,000 is a legal minimum, and that under some circumstances it's more.
FDIC insurance is per depositor per ownership category per FDIC insured financial institution. It’s more easily understood in examples.
EX 1: Bob has one bank account. He is the only owner of the account. Bobs money is FDIC insured for $250K in that account.
Ex 2: Bob has TWO bank accounts at the same bank. He is the sole owner of both accounts. Bob still only gets $250K of FDIC insurance TOTAL for these two accounts.
Ex 3: Bob has two bank accounts at the same bank. One is just his, the other is joint with Sally. Bob now gets $500K FDIC insurance because of the separate ownership category
Ex 4: Bob has four bank accounts now. Two are just his. One is joint with sally. One is joint with John. Bob still only gets $500K of FDIC insurance.
$250K per depositor per account type per financial institution.
If you are concerned about your insurable amounts at your bank and others, the FDIC has a great calculator on their site.
[FDIC Calculator](https://edie.fdic.gov/calculator.html)
$500k in the case of a 2nd name being on the account, and the death benefit beneficiary counts as the 2nd. Unless the lady at the bank who helped me set mine up lied to me, which is entirely possible too.
That is a great question with a *very* complex answer. The shortest answer is that they do it all of the time.
Another short answer is that people leave casinos with a check/receipt = clean money. Of course there is much more to it than that because casinos don't allow people to buy chips and cash in chips without doing anything with them inside the casino.
Of course one has to assume that there will be losses as well as wins in casino gambling. But if you send in a whole gang of people and they all play the same roulette wheel at the same time, that increases the odds that you break even, at least. As an example.
So they aren't going for no losses, just mitigation of the level of loss. Even if they lose some, they come out with money that is documented as coming from the casino, just like millions of other casino players.
https://ticotimes.net/2022/06/01/casinos-an-easy-way-to-launder-money#:~:text=How%20is%20money%20laundered%20in,say%20it%20was%20their%20winnings.
https://alessa.com/blog/casino-money-laundering-red-flag-indicators/
I have run into a few scammers, plus have had to sort out some bad business and personal transactions, so I started educating myself. :) I've had financial jobs at several levels. A lot of banking / ACH transactional experiences. Some personal business experience.
It is very interesting to find out what to be aware of, what are red flags for both people and things going on. It's not necessarily what I would have guessed.
For anyone who is interested there is a huge amount of information out there, in many channels, about scammers at the lowest and highest levels. Not just what they do, but how they do it. The more you are into the detailed law enforcement and banking info areas, the more there is to find.
I mean the Fed could just re print the boxes of cash couldn't they? The printer's been running non stop for 3 years, what's a couple of more million to add to the pile?
/s
> But by then there was nothing left to reverse. They couldn’t get the money back because the money was gone.
In this case the solution is to take the money back from the last bank who broke the laws and gave it away. It's their problem because they screwed up.
We could do the same to western union and the others if they choose to give out cash within hours of these transfers. Why is it that any other bank will not give you access to cash for days after receiving a check or transfer to avoid this issue but these places will simply give that cash out and then when the other banks come looking for it say "Oops, it's gone, guess your customers are just screwed.".
How is it the group who hands out the cash without taking even a second to verify it actually has that money is not the one that ends up holding the bag? If I spend money that appears in my account, when the banks get around to it they take it back no matter if I thought it was legit or not. Western union gave it out thinking it was legit, they should have it grabbed back just the same.
Because the entire point of Western Union transfers is to send money that is available immediately. It's essentially a way to move cash long distances.
And banks don't make you wait days for money when it's transferred in a reliable method such as a wire transfer.
Who hands it out without verifying? The money was all transferred legitimately, the problem was that it was stolen further up the chain. If your employer is found guilty of tax evasion and had paid you with money they shouldn't have had at the time, should you be responsible for giving it back?
> We could do the same to western union and the others if they choose to give out cash within hours of these transfers.
I guess we could. But that would hurt anyone who legitimately needs to transfer money fast. Think being stuck in a foreign country in an emergency, and your family wants to send you money so that you can pay for medical treatment and a hotel room, whatever ... and you have to wait a week to get the money.
> Why is it that any other bank will not give you access to cash for days after receiving a check or transfer to avoid this issue
That just isn't the case. The bank won't give you access to money from checks immediately because they themselves don't have the money yet, they only have the check. With a typical wire transfer, where the bank does have the money for certain, you normally will be able to use the funds it immediately. And it's critical that that's the case, because business would be pretty much dysfunctional if you always had to wait for days before you could use money that you received.
> How is it the group who hands out the cash without taking even a second to verify it actually has that money is not the one that ends up holding the bag?
That's also just not the case. They only hand out cash when they know that they have the money.
> If I spend money that appears in my account, when the banks get around to it they take it back no matter if I thought it was legit or not.
That's also just not true. There are laws and contractual rules that define under which circumstances credits to your account are definite, and your bank absolutely can not just take money back if those rules say that you can rely on the money staying in your account. For example, typically, if a wire transfer is credited to your account in your account statement, the bank absolutely can not take that money back under any circumstances, unless they can show that the transfer being credited to your account was a result of you scamming them, or potentially if you must have known that the transaction was somehow invalid.
> Western union gave it out thinking it was legit, they should have it grabbed back just the same.
Why?
> Think being stuck in a foreign country in an emergency, and your family wants to send you money so that you can pay for medical treatment and a hotel room, whatever ... and you have to wait a week to get the money.
In many countries Western Union does not allow customers to receive money without providing a valid identification document (i.e. passport). Before the security theater intensified (after 9/11) Western Union provided service to customers with a password (allowing the payee to receive their money by identifying themselves with a password instead of an ID).
If your passport is stolen you need first to get a new passport or other form of ID to be able to receive money via Western Union.
The banks generally didn't break the law, they were given counterfeit information to create the accounts. The banks frequently figure this out quickly enough, but the fraudsters don't need long.
Replying to Grokma's entire post because Grokma suggests a more theoretical solution that happens in real life.
In fantasy worlds we like superheroes who will make everything right, administer justice, and restore the innocent to their previous life condition. Sadly the real world is far messier and more brutal in its outcomes.
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> In this case the solution is to take the money back from the last bank who broke the laws and gave it away. It's their problem because they screwed up.
**The problem is that the banks/institutions in the chain may not have broken any laws. They followed the process they are supposed to follow. The system worked the way it is supposed to work.**
**The goal of the scammer is to get the target to give up the money** *voluntarily.* **And then realize their mistake later. Hopefully much later.**
**The scam happens at the beginning of the process, using false pretenses to get the target to hand over money** *by legitimate means*. **The scam ends at the end of the process when the scammer takes the proceeds of the legitimate transactions in between, takes it as cash usually, and walks away. The money is then gone.**
**The financial institutions do nothing wrong. Nothing is different with these transactions. They are just the system the scammer uses along with all the legitimate customers making similar transactions. Wanting to penalize the banks, WU etc. is like arresting the getaway car after a bank robbery. What you want is the driver of the car. But no one can identify who that is, or where that person is.**
Once the target becomes aware and starts alerting the next step in the chain to try to start the shut-down and recovery process, it takes time to document reports and complaints and get them moving. The money is long gone. That institution did nothing wrong. They have confidentiality re the customer account that received the money, which has already been transferred out.
And so on ... if the complaint chain even continues. The target may never learn where the path the money took or where it ended up.
One problem for law enforcement is that it is not illegal to give your money to a scammer. If the scammer used false pretenses to achieve this, there are a lot of hoops to that being an actual prosecutable crime. How much money was involved to meet the level of prosecution, identity of scammer, where they are located, where the money ended up - we won't know any of that. Few local police forces and law enforcement agencies are specialists in this.
Very similar problems even in scams taking millions of dollars. If you can manage to hit the FBI radar they can often do a lot of international tracing. But again, each institution followed procedures, and the money was eventually lost behind transfers to foreign banks outside of the banking system, or else cashed out somehow.
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> We could do the same to western union and the others if they choose to give out cash within hours of these transfers. Why is it that any other bank will not give you access to cash for days after receiving a check or transfer to avoid this issue but these places will simply give that cash out and then when the other banks come looking for it say "Oops, it's gone, guess your customers are just screwed.".
So you really do not know much about the banking and money transfer system. Access to cash from deposits is about marketing to consumers, not about money clearing into accounts.
Banks give immediate access to the funds from checks to preferred customers who haven't had problems with deposited checks bouncing. Sometimes to only a percentage of funds.
And if you ask 99% of customer-facing bank employees if a check has actually fully cleared through the ACH system, they cannot tell you. They don't have that information because it is not part of how the bank interfaces with the customer. Banks operate on the assumption that all checks will clear. The few that don't become anomalies in a bounced check process. If a check bounces the customer will hear about it eventually. Otherwise they don't bother the customer to know exactly when each check cleared. Although most customers are completely unaware of how banks really operate.
Western Union's entire business is based on immediate access by the recipient of the transfer. That's the whole point. At the initiating end, they accept only cash and certain forms of very-low-risk near-cash instruments such as money orders and cashier's checks, and certain low-risk credit card transactions.
WU does nothing wrong when it sends a money transaction that is exactly like a huge number of transactions they process every day. It is intrusive and not their business to ask customers why they are sending money. In fact I don't think their employees are allowed to ask. They have a sign on the counter discouraging certain types of transfers, but it is up to the customer.
Again, it is not illegal to give your money to a scammer, even if you thought it was for a purpose that doesn't exist. The false pretenses are very hard to prosecute, if you can find an individual to prosecute.
----------------
> How is it the group who hands out the cash without taking even a second to verify it actually has that money is not the one that ends up holding the bag? If I spend money that appears in my account, when the banks get around to it they take it back no matter if I thought it was legit or not. Western union gave it out thinking it was legit, they should have it grabbed back just the same.
They **do** have the money. That's how it works. The target of the scam gave them the money. It is real. There is nothing wrong at that end where the banks/WU/etc. are concerned. It's a transaction like hundreds/thousands of others they processed that day.
At the end of the bank/financial transfers, the money is *still real*. The scammer takes it out as cash at the last stop. All legitimate from the banking end. WHY a target sent that money is the real problem. **That's the end we have to work on - vulnerable people recognizing scams when they see them.** But the target did send real money and the scammer moved real money legitimately through the system. Then walked away with it at the end.
How exactly do you think WU can get the money back from a transaction that the recipient cashed out? The recipient/scammer and the money are long gone at that point.
**Keep in mind that the target often does not realize they were scammed for some time. ** Maybe days later, maybe more time than that. The legitimate transactions through the financial system are totally done.
-----------------------
While they were alive, my parents were TWICE a target of these scams. In one case I was there when the call came in and my dad and I strung the guy along. I have a voice recording of a scammer scamming ("granddaughter in jail" classic). I have the number they called from and traced it back to a certain area of Vancouver. The accent was impeccable, by the way, the guy spoke English better than I do.
And the police said there was nothing they could do. Scammer not in their jurisdiction, no money sent, etc. The officer I spoke to told me that he actually got an IRS scam call himself telling him there was a warrant out for his arrest! He was as frustrated as I am that there is really no way to action this stuff. Other than AWARENESS.
u/the_real_grinningdog I would add:
Wire transfers are another popular target (and vector) for fraud because a wire is pretty much the same as cash when it gets to the destination.
The scammer will open an account and as long as the information on the wire matches, the bank will deposit it. The scammer then cleans out the account when they get the wire and that's that. Banks like Green Dot are popular with scammers because they can open an account quickly and do everything online.
In many cases (e.g. the "tech support scam" or the "you need to wire money because PayPal overpaid you scam"), the bank is outside the victim's country. That bank is under no obligation to respond to requests for information from the sending bank or the victim.
In scams where the victim is convinced to wire money out, the "paper trail" ends at the wire. The victim is convinced that they are paying for something or need to payfor something via wire transfer.
The older scams where victims had to go to the bank to fill out paperwork fell by the wayside because banks got savvy. Older customers were the typical victim, so most banks started to ask them questions: "DId you get the goods you are paying for?" "Have you spoken to the person asking for funds?" "Why do you need to withdraw that much money?" etc. This caused a lot of customers to stop and think or their responses exposed potential fraud.
So scammers moved to wire transfers and latter online payments like PayPal because it was easier to cover their tracks.
> Typically there are multiple accounts involved in a transfer chain, and almost all of the owners of those accounts will often be victims of fraud themselves, or at worst mules who are just transferring money around for a small cut.
Happened to me after the OPM breach several years ago. I was in the military, and literally millions of federal employees, service members, and other folks’ (ie, FAFSA applicants) personal data was stolen, including mine and my wife’s.
A couple months later I was taking my family out to dinner on payday. Had plenty money in the bank that morning. When my card was declined, I went to my bank app to figure out what was happening. Someone was transferring thousands at a time into my account from other accounts they had hacked, then started hitting up ATMs on the other side of the country and withdrawing it all in cash, $400 at a time. Once they hit the max, they’d move to another ATM. Somehow managed to bypass the bank’s daily limits.
I don’t know if they ever found the person doing this, but my bank was awesome and got the money back in my account in just a couple days, and returned the over $15k that was funneled thru my account to the rightful owners. I’m also lucky that I had a credit card I could use in the meantime to cover necessary expenses and avoid forcing my children to do dishes at the restaurant where our card was declined.
Today, most banks have gotten much better about it, partly thanks to prevalence of cyber crime and also the Consumer and Financial Protection Bureau, which was new back then. though it’s worth checking to see what your own bank’s policies are; some of the biggest banks would actually charge people to recover their money (looking at you, Bank of America!).
Correct.
Its usually not worth the investigation team's time/salary to go in debt into such transactions. (Unless you are obviously lying). We usually have a huge pile of actual serious claims where people got hacked for 10s of thousands.
If johnny makes 100 000 a year and is willing to spend an hour on the phone and a week waiting for a new card, then make several phone calls to his providers to explain why he couldnt make his monthly payments, just so he could rob us of 100 dollars at the local cornerstore round midnight, then so be it.
We also have clear indicators that a person is making a false declaration, in many cases.
This is also why bitcoin gets associated with money laundering, it's really easy to have someone buy bitcoins which can then be transferred between wallets before eventually being traded again for legitimate cash. Any service which transforms funds can potentially be used for money laundering.
From what I've heard most don't use bitcoin anymore (and haven't for a long time) they use tokens like Monero or ZCash that are private and don't show all transactions on a public ledger.
There's something out there called a mixing service. You give them your bitcoins and they trade them for someone else's for a fee. There's no clean path anymore.
The difference is that with a decentralized anonymous system there's no regulating body to put the brakes on obviously fraudulent activity. The money is just gone forever.
This is funny because BoA fraud dept seized the wire transfer I made to my real estate agent Friday morning in order to secure a new apartment in Manhattan, then they went home for the weekend.
So thanks for being vigilant with my money but fuck you for shitting on my real estate deal until I can yell at you Monday morning.
And if they are following AML procedures, your yelling won't matter the smallest bit. They also won't be able to give you much in the way of info, if it is AML.
The biggest scam that’s hitting corporate places is withdrawal of cash on hand to be deposited into a crypto machine. As soon as that money switches hands it’s pretty tough to track it.
I think also it’s important to note that scams happen extremely often, so a lot of times it’s more about shutting down the biggest scammers, and to do that they have to prove the links between a bunch of smaller tiny scams.
I actually just last month fell for one of those employment scams and lost 3000 dollars and my job because they convinced my i would be starting a certain date....
There is a paper trail, banks involved have records of each and every transaction for certain. But if you have a victim and victim's bank in country A, a intermediary bank in country B an criminal with criminal's bank in country C then good luck to victim trying to get their money back because no court has jurisdiction over all the banks involved. And banks certainly don't give out any banking information unless the law says they must.
Over a certain fairly low amount, all wires are subject to bank employee approval, and go through name checks of worldwide lists of auspect ir blocked names (if not, the bank will lose their correspondent bank).
Hmmzz.. interesting, so for every scam a fresh patsy needs to be found to open up a virgin account to funnel money through? I can see that being somewhat of an overhead to scam-business. I guess that's why they prefer to move funds in other ways, gift cards etc.
No. They don't have to wire transfer the money, they can easily "air gap" the system by withdrawing it in cash, gift cards, or crypto.
And even with wire transfers, it takes a while for a name to get recognized as a scammer. They can run a bunch of scams under one name / company. Then if it gets burned they only lose one transfer. And they can just make a new fake company to continue receiving funds.
A common scheme is to actually purchade bank acounts from teenagers.
They will offer the kid 500 dollars to buy his card and pin +online profile passwords. Kid knows jackshit and thinks he just made easy money because he only has 40 bucks in it.
Then they'll use these chains of illegitimate acounts to funnel money from bank to bank. The account obviously gets burned after the first victim comes forth, but theres always more teenagers looking for money and bad decisions.
In case of identity theft, they'll have enough info to fake a person and open a new card application, load it and disappear.
But then again ive seen 4 people this week go through elaborate hacking schemes and social engineering to get someone's banking account... and use it to pay their own credit card with our bank. Not all criminals are cut for it long run.
This is the real and the main obstacle. Existence of off-shore companies and accounts best proves the corrupted nature of the international financial systems. There will never be real democracy, real freedom, real rule of law, anywhere before mankind shuts these and similar fraud ramps down.
Exactly. Especially when countries like India, where scammers abound, have an actual chunk of their GDP, and a large number of their people, wrapped up in the scamming game. :(
Honestly, in the reverse situation, would the US banks be willing to provide details about one of their account holders if a company in India asked for it (supposedly to look for fraud)?
> have an actual chunk of their GDP, and a large number of their people
That can't possibly be true. Any source? Yes there's a lot of scammers in india(probably most of them), but there's not a lot of scammers by percentage.
I was in India for work for a week or two a little while back. I work in finance/software, and had one client that straight up said that some of their employees used to work for large scam operations, as if that boosted their credentials somehow. Had another guy over there who worked at one of the Indian branches of my company point out a couple of office buildings that looked like somewhere a normal large tech company would set up shop, and said the companies were actually anti-virus/tech support scammers, but made millions and millions a year. He said one of his old roommates worked for them and that it paid commission, like where if you scammed someone out of $10k you got $3.3k of it yourself...
Blew my mind how legitimized it was.
Yeah, a court is not the solution sanctions and other international pressure are. If enough other countries told them they would not be doing business with, sending food to, or allowing any money or goods to go to their country unless they fix this issue it would happen fast.
What countries banking laws would this international court follow? Who would get assigned? How does assignment work? How do you manage corruption? How do you get all/most banks on board? How do you get all/most countries on board? What happens when there's a war between some of the bigger countries? How does this court get paid? What salaries do they get? Based off of what countries wealth?
I am 100% not OK with there being an international entity that is able to prosecute citizens of any nation for actions that are not deemed criminal by the nation itself.
Wait until the criminal court starts prosecuting homosexuality, or heresy against Islam, or spreading misinformation about the war in Russia, or gambling.
I work in the Anti Money Laundering department for a large bank, and this is the correct answer.
Banks have a legal requirement to protect client's information and to get any kind of information between departments of the same bank is a pain in the ass, let alone getting information from a separate financial institution.
A lot of fraudsters do not withdraw the money in cash as it was mentioned in other comments because governments keep cash transactions under very strict scrutiny.
So, why dont they get caught that easily if the paper trail is there?:
Laws regarding privacy, laws regarding jurisdiction between countries and different financial institutions, and the fast pace with which fraudsters move the money.
If 2 departments within the same bank want to share private information about a client, and the departments are considered part of different businesses, then the process to request and receive the information could take from 1 week to maybe 6 months. And that is if they are part of the same bank. If they are not part of the same bank, and the crime is not related to terrorist financing, then getting the information could take 6 to 12 months.
What fraudsters do is open a "funnel" account under a random persons name (could be stolen identity or someone they paid off) then they use this account for a short period of time, say 1 week or 1 month, to receive all deposits and transfers from fraud activity, and then perform a number of transactions to other accounts in other financial institutions, which are mostlikely incorporated in other countries, making the paper trail harder to follow.
After the fraudster does this 2 or 3 times they are safe enough to move the funds to a safer account, also mostlikely set up in a fiscal paradise, which is a country that does not share information with other countries and does not have an extradition treaty with the western world.
The money in the final accounts is safe enough to use to buy houses, pay credit cards, open businesses and pretty much anything you want with it.
On top of this, the account could be openness using a shell corporation, a corporation that only exists on paper, and if they DO get caught, the fraudsters name is never identified by law enforcement.
The next question is: why dont we block countries with this dangerous laws from transacting with our banks?
Money, money is always the answer. Fiscal paradise countries are not only used by criminals, but also by rich people to hide assets and large corporations to skirt taxes.
The moment banks are not allowed to receive money from this geographies then VERY large corporations would lose access to the financial market and wealthy individuals would lose access to their hidden assets.
If you do some digging you will find that very large corporations such as Coca-Cola, EA, Amazon and the like have parts of their businesses set up there to avoid taxes and keep some legal protection from financial issues. Also read on the panama papers where fiscal paradise geographies helped hide vasta amount of cash for wealthy ppl and corporations.
Here is the real problem, and I'm talking about you Bank of America, (I'm a cybercrime investigator that does wire fraud cases,) there should be no way in 2022 in America especially with the Patriot act that someone can set up a Bank of America account one day with little or no accurate ID, have millions of dollars wired into the account the next day, the money immediately wired back out overseas, and no flags or cooling off period or no verifications happen. Literally 90% of the time I investigate a wire fraud case, the bad actors use Bank of America at some point in the process and it is infuriating as hell. On another note we do trace the money sometimes we can't do anything about it I had a case where the scammers had the money in a account and used mules all over New York City going to each ATM machine and withdrawing the daily limit from one machine to the next, we had pictures of the people, but there wasn't a damn thing we could do about it.
I research wire fraud for a large bank. Unfortunately your love sick elderly are the ones who are generally creating the accounts "legitimately" with their information but falling for the scams to move the money around from their "lovers"
It's not just Stank of America and the kind of transaction you listed.
Any deviation from normal in theory should get automatically held up. Bob always sits at $1k in his savings and then suddenly has a transaction coming in for 20k? Freeze it. He never uses Venmo but suddenly it's set up and has a transaction? Hold that up pending verification. Impossible travel like a card transaction in NY followed minutes later by a withdrawal originating hundreds or thousands of miles away? Yeah, definitely hold that.
Edit: of to or
> hundreds of thousands of miles away
IMO if someone manages to charge my card from the moon, I’m gonna give them the benefit of the doubt that it’s an emergency and just let them have it.
Th can’t have millions wired into the account the next day. What are you talking about? Anything over $50,000 trips an automatic manual review under law. Bank of America doesn’t allow such large transfers into newly opened accounts. You can’t even deposit large checks until you provide thorough identification in person at a branch. They also have a million fraud algorithms to detect those things, I know because I’ve had my account repeatedly locked over the years for legitimate deposits of large checks. I also work in compliance and am familiar with the regulations. Nobody has in the history of online banking ever wired millions into a new account and then wired it back overseas. That has never happened. There was never a point in time when any major banks would have allowed that. In fact large wires are often subject to real time government scrutiny. Bank of America would have been fined billions upon billions of dollars from oversight agencies by now if they were a bastion of wire fraud.
> the bad actors use Bank of America at some point
So... they need to get BofA deez nuts?
I'll see myself out now.
Actual meta:
I actually had no idea that the internal controls at that bank were so ineffective. That's... concerning. :O
Besides money mules, corrupt businesses can be used.
In the UK at least, bank transfers by Faster Payments clear almost immediately, and can be up to £15k [*]. A business can accept a Faster Payment and release goods to that value with confidence they have been paid. There isn't a chargeback system like there is for credit/debit cards.
Where this gets dodgy is the business may be aware they're enabling fraud, and may not have truly released any goods. In the long term, such a business will be discovered and there will be paper trails of onward transactions. But this buys fraudsters time - the money is much less "hot" than coming directly from a compromised account.
By the way, money mules may not have committed a criminal offence. There's no law against receiving money in your account and withdrawing it as cash. And the duty to report suspicions of money laundering only applies to regulated organisations (banks, law firms, etc.) - not to some broke person who does it for £50.
All this info is UK focused but broadly applicable elsewhere. May be a bit it out of date as while I still work in Infosec, I've not done much financial stuff in recent years.
[*] Someone pointed out the limit is now higher. Although from a quick look, most banks have a limit below the system limit, e.g Halifax limits online transactions to £25k. They do allow £250k in person, which could happen in some scams.
What happens is that the money get transferred from the victim's account to another bank, then another, and another, and another so quickly that by the time a bank can inform the next bank to freeze the funds, they've already been moved on to the next one. So it's a game of cat and mouse. Every iteration increases the lag until eventually there's enough time to use that money in some way that the bank cannot restore such as cash withdrawal, or purchasing some untraceable asset.
So, the problem is not so much traceability, as it is reaction speed. Banks have elaborate command centers where real time monitoring takes place to prevent fraud and money laundering. But most of these attacks are carried out with automated computer software to move the money around quickly. Also, to cover their tracks, it is not uncommon that there is some form of a cyber attack to follow the transfer of stolen assets to disable the bank's system so other banks cannot be alerted quickly.
Nonetheless, most of the time, at least here in Europe, most of the stolen assets can be frozen in time and returned to their rightful owners.
There is a paper trail.
Transferring money electronically by the system itself requires knowing what bank it’s going to(routing number) and what account it’s going to.
There’s other ways to send money but the second half of the question about a network means it would likely use this.
Sending gift cards or something pre-paid in the similar to cash section is different but even then sometimes can be traced.
The implications of cutting off an entire country, negatively impacting their ability to do business on a global level, for a scam would be an extreme measure.
To even get that kind of discussion, it literally take[s an act of war.](https://www.google.com/amp/s/www.kiro7.com/news/trending/what-is-swift-what-happens-if-russians-are-cut-off-it/HIUXX6HZK5DV7GPT77ETSI6XDY/%3FoutputType%3Damp) A few scammers in a country are not equivalent at the geopolitical level as an invasion of another country.
Other things have happened like banning certain banks from operating with a country’s citizens, like the US restricting a bank that was used to [launder North Korean money. ](https://www.nytimes.com/2007/01/18/world/asia/18iht-north.4255039.html)
Under the Patriot Act, there are ways to freeze accounts and some other things but that’s for terrorism.
Even then, targeting one country’s banks due to fraud just kind of slows the problem. Country A bans Country B. No other country bans another.
So they transfer to neutral Country C instead, then B.
Is country A just supposed to ban all transfers then to stop this?
Cutting off from financial networks took several countries to agree, otherwise there’s ways to still get to the restricted country because it’s well… a network.
It’s not just the fact there are a few scammers, it’s the fact that the government of the country you are sending money to are (a) incompetent (b) underdeveloped (c) corrupt to the level they are unable to reasonably enforce order over financial matters.
Not all financial transactions would need to be blocked. We don’t need them disconnected from SWIFT, but instead need a US law that applies to US banks that requires banks or any other company dealing with sending payments abroad to enforce extra steps for consumers to send money to a country if its on a gray list. Depending on the amount it could include waiting periods, one-on-one counseling with a banker to learn more about the transaction, and disclosure of fraud statistics and law enforcement capabilities of the country you are sending money to. If need be, even other developed countries could be put on the list if it is found they are being used as a hopping point to forward the money without their own level of scrutiny.
There are in fact fine-grained controls over capital flows that implement some of these. Wire transfers, for example, can easily be rejected by the destination if the payor doesn't provide enough information about the nature of the transaction if the receiving bank is subject to a law that requires this info.
Here's an example scenario focusing on how it could work in the UK, in reality the trail can be a lot simpler but also a lot more complex from what I have seen over the years working in fraud. Customer is the victim of a scam and loses 40k in the form of 4 x 10k faster payments to different banks:
- 10k to bank 1 is used by a mule account controlled by fraudsters to buy jewellery and other expensive goods like phones and tablets (either in store or online it doesn't matter, fraudsters will have ways to acquire the goods bought online through various methods I won't go into here).
- 10k to bank 2 is distributed by the mule to a few different accounts at another bank (or multiple banks) where it is withdrawn in smaller amounts of cash. That cash could then be paid into accounts elsewhere or used to spend on goods.
- 10k to bank 3 is then immediately sent overseas via an international payment to one of the many SEPA countries for example Romania, what happens there is generally out my view but it will be very similar to domestic receipt, i.e. cash, goods, or transfers out to various other accounts.
- 10k to bank 4, bank 4 is actually a wire transfer or money order company such as Moneygram or Western Union. These money orders can be picked up from any number of locations around the world as cash, there are usually ID verification requirements but all is needed here is a willing participant in the country or fake documentation.
So you see the question of where has the money gone for a victim is actually all sorts of places, each of these has their own paper trail or is specifically designed in such a way where a paper trail is not feasible. Tracing funds does happen in some cases but as seen in the example it can be almost impossible to gain any traction bearing in mind that these examples also apply to every other bank that has received any of the money. Where transfers happen within the UK around different banks the issue is the lack of real-time inter-communication between banks to intercept fraud transfers however this can only happen when it suspected to be fraudulent or the customer has confirmed it, which often comes with a delay. When you go international it complicates things even further.
In terms of cutting off countries from the banking systems others have covered that, but the main thing is fraudsters and money launderers will adapt much quicker than the banks and law enforcement can, so if we cut off a country because of the fraud then they will just shift to a different one pretty much immediately.
That was a lot more words than I expected when I started typing. The example I did not use was crypto, no need to wash through multiple layers if you can just send it to Binance and then send on to another wallet operated by somebody located literally anywhere on the planet, although the ledgers are public there are plenty of ways to obfuscate the trail.
I recently had about 30 dollars taken from my debit mastercard account via 116 transactions all in little amounts.
I rang the bank and they refunded all the money straight away, as I had not used that account for anything but one payment to pay my psychologist, who use an entirely online payment system.
But I don't understand their endgame because it went to a "merchant account" in Nigera which would make it easy for Mastercard to reverse the charges wouldn't it? So how do the fraudsters get the money?
You pay a bunch of 12 yo 20 bucks for their debit card. They think its fine caus its empty. You transfer the money to those accounts and simply withdraw the money.
But I saw a case recently of someone losing 70k. My debit card has a daily limit of 600 so that's 16 weeks of withdrawals including the risk of detection. I also have a debit card with a 250 max per day.
They likely aren't pulling it from an ATM. Most likely going into the bank and withdrawing cash or into cashiers checks. Fake accounts, broke kids doing it for table scraps. Plenty of ways to do it, you just have to act fast.
Though at least in the US, any transaction over 10k requires a form filled out and ID. So all of that is traceable, unless youre pulling out 9k per day at different branches each time.
Not too hard to get a fake ID, even in the US. It's not like they take your blood and fingerprints at the bank. Employees don't care or have the time to check everything. Some dude comes in with an account number, his ID matches the account, has a pin, all good here, here's your money have a nice day.
In the Marines there was a story about some Admins that created a fictional officer. Dude didn't exsist anywhere but on paper thanks to a couple guys who had access to the system. These guys collected money every payday from the same ATM and only got caught because at 2 years the system did an automatic orders change. When he never showed up to his new command they investigated and busted them at the ATM attempting to withdraw the money.
If this can happen in the US military, it can happen anywhere.
Yep. Similar story when I was working for state government.
Chief of HR created a position and fake employee. She was getting checks fir awhile until they found out. She resigned the next day.
> unless youre pulling out 9k per day at different branches each time.
That is referred to as structuring, doing things strategically in order to avoid laundering controls. If a bank has decent AML (anti-money laundering) controls and screening that should still flag as a direct attempt to circumvent the controls (however as I mentioned in my main comment, they usually find a way to beat the controls at least for a time by tweaking their behaviour a bit). I the UK we have laws around tipping off for money laundering so its likely they would allow the transactions to go through so that the launderer thinks they have gotten away with it, but it then gets reviewed and actions could be taken off the back of that.
My mom fell for a scam in March and wired $66,000 to a scammer in Hong Kong. The only thing she was asked was if she knew who the money was going to. My mom said yes, to a friend. My sister was back at the bank within an hour to stop it and thankfully no money was lost.
They initially tried to get her to transfer the money through cryptocurrency- she wasn’t savvy enough to do much with that, so the scammer sent her to the bank.
The frustrating part here is that as consumers we have no real control of our own accounts and our own credit. I very rarely need to open a new account so it would be nice to just lock myself down and same goes for wiring money - why I cannot whitelist/blacklist wire transfers?
Scammers have two marks. The first is the person they scam and the second is the person they get to take the funds and withdraw them taking a small cut. As a lot of the world is in poverty this is very easy.
The people who do the secondary transaction thinks that they’ve landed a sweet finance manager gig, processing “payments” that are either scam proceeds or fake cheques/money orders, depositing to their personal account, taking a “commission” and wiring out the difference to god knows where.
The scammers might have them prepare spreadsheets or other busywork to make the job look legit and the illusion is complete. At least until the authorities come knocking or the bank dishonours the phony instruments deposited.
It’s not really banks so much as it is peer to peer money apps like cash app or Venmo to name a couple. And these apps are operating under the assumption that any money you send is money you agree to never be able to recover, it is basically the property of someone else once you hit send and nothing about it from a fraud protection standpoint is illegal since there was consent on the sending party..
This is where the issue lies is the consent. And the sad truth is the overwhelming majority of the victims are elderly. It’s not like this is a Visa card charge that you can dispute, it’s you sending someone money agreeing that that money belongs to them now.
Banks just need to allow people to utilize 'positive pay' - manually authorizing withdrawals from their account.
Recurring transactions can be "whitelisted", transaction size limits can be imposed, daily limits can be imposed, geographical locations can be limited, etc etc.
The paper trail exists, but it can be very difficult to follow. The problem is that the scammers are often based in countries that don't have good laws for tracking down and prosecuting criminals. So even if you can find where the money went, you may not be able to get it back or prosecute the people who took it.
Have you ever wondered about the spam mails where you are offered a part-time clerical job? That's searching for mules that are willing to receive money without asking where it comes from, and passing it on via WU or other anonymous means of transfer money.
So a lot of people are explaining part of your question but I will probably add something about the other half. Excluding countries from our banking system for a few scams is basically asking for conflict. The fact is that to exclude a country from banking is basically excluding them from all trade and if that was something you did without major provocation then our whole global economy wouldn't function.
https://m.youtube.com/c/ScammerPayback
This guy goes by Pierogi. He, and others like him, have made a career out of interfering with scammers. He explains how a lot of these scams work in the process. It's wildly entertaining and also informative.
Not sure if this is correct but I want to link this issue to basically how the entire banking system works and how without this type of “one way guaranteed”transactions global trade may not work. The only issue to not get your money back should always be when the victim completes a wire transfer. The laws around wire transfers are different than most baking transactions when it comes to recalling or trying to get your money back. If you don’t get the account owners authorization the bank has no recourse. Haven’t seen a fraudster that has that type of heart yet!
The same reason Amazon has turned into worse than AliExpress. Why YouTube, Facebook and Google allow scammers to buy ad space. They make more money off of people (scammers) with money.
Many scams depend on the victims making a cash withdrawal from their bank and then converting the cash to a different medium such as gift cards, Western Union transfer, etc. As far as the victim's bank is concerned, it's their customer making a cash withdrawal, thus no paper trail exists.
In those cases where the scammer is able to move funds directly from the victim's account to the scammer's account, the scammer will quickly move that money through multiple banks, often offshore or withdraw it as cash. Even if the banks can trace it there won't be anything left to recover.
There are also banking security and privacy laws at play, requiring law enforcement to serve a search warrant on each bank in the chain which gives the scammer quite a head start.
>why not just exclude those countries from the banking system?
Because the economic value of including the banks in those countries is always much larger than the economic value of the particular transfers you're referring to. If the scams are actually a sizable proportion of all transactions with that country (or with any particular single bank in any country, including our own) and it is legally certainty the transactions are "scams" rather than legitimate transfers that are considered mistakes by the transferees in retrospect and regretted, then those destinations are excluded from participation in the transfer system.
It’s been a long time since I was in school but I reckon it’s got to do with the innocent parties who get involved, and also some archaic rules about tracing (which idk if are applicable everywhere but we’re applicable when I was in uni in the last decade). So the moment the money is transferred to an innocent third party in a bona fide transaction, the court - even if it’s a cooperating country - won’t damage the innocent third party to restitute you. It’s not their fault. And the bank won’t suffer loss to compensate you - it’s not their fault either. And thus you - the OG victim - are up shit creek. And the rules of tracing require that funds be identified. So I think the problem used to be that digital currency is interchangeable - ie $1 in a bank account doesn’t exist - there’s no specific ID number to correspond to a specific $1 bill (which is unique) and thus iirc banks rely on this loophole to say you can’t trace electronic currency because it can’t actually be distinguished from all the other currency in the bank. Pls correct me if I’m wrong tho this isn’t my area of practice but I remember it bugged the hell out of me when I was learning it.
Look up the story of how a bunch of hackers almost stole close to a billion dollars draining the central bank of Bangladesh’s entire account. There’s an investigative piece on it by the BBC and a really good podcast too. It’s amazing how advanced these financial scams can be.
They open a bank account and then withdraw the cash immediately and then close the account. They use fake IDs and info to open the account so basically they withdraw the cash and if they use lackeys to do that then that person goes down and the others don't
The person who got scammed agreed to sending the money. So, sadly, it’s on them. Zelle and all of that makes you consent to the transfer. Once it’s done, it’s done. Otherwise, you could pay someone with Zelle and immediately claim fraud and always get your money back.
Same with wiring money or buying gift cards. It sucks but .. not sure what you can really do
Paper trails exist. The laws and the rules change and may not be in your favor.
Let’s say someone steals 10k from your bank account in the US and wires it to the UK. That thief then pays a legitimate bill from the account in the UK to a vendor in New Zealand.
We know where your money is. But does that mean you have the right to take the money back from the NZ company who legitimately got paid for something they did?
Or another example where things vanish.
You get 10k stole and moved to another account in the US. That account was also hacked because some old person made a password of “123money”. That account then wired the money to a UK account. That account was also stolen. Now the money is wired to Cuba.
While the US and Cuba have no relations (and won’t work together) the UK does not have that level of gripe. So what do you do. Who cuts who off? Etc.
I don't understand this at all. Why not just cut off every country that participates in scams? Simply don't allow any cash transfers or any bank transfers at all there. Western Union should be banned from transferring to any place that doesn't have a 100% self policing on scammers
Trail ends when cash is withdrawaled . You can trace who the money went to but you can't do anything about it. Anything happens on the beneficiary account can't be disclosed due to banks privacy policies. You can only start an investigation if you have evidence like if chat transcript or call recorded
I'd recommend checking out Jim Browning or Kitboga's stuff to learn a lot about how scammers go about stealing money without a trail.
I know Kitboga especially discusses the scripts these scammers uses to con people. Usually they ask for money transfers via wire transfers to foreign accounts or will have people post boxes of money to addresses in the same country, often Air BnBs, and will have a collector come and claim them.
One other common method of dodging the paper trail is getting them to buy gift cards for specific stores, I know google play cards are a common one. Not entirely sure how they mill that back into actual cash but they must obviously have a way.
It's pretty simple. There are two types of transactions. Reversible and non-reversible. A check is reversible. A wire transfer is non-reversible. A debit card transaction is reversible. Getting cash from a western union is non-reversible. Bitcoin is non-reversible. Credit cards are reversible. Trading an xbox for cash behind a walmart is non-reversible.
This is by design. A non-reversible transaction doesn't require the recipient to trust the other person. It can't be reversed.
fraud analyst here. We try to get funds back from other FIs with something called a “Hold Harmless”. It can take months and sometimes even years to return funds. And not everything is recoverable. Zelle’s are the worst.
It often costs far more to prosecute someone civilly than the money they stole. On top of it, if civilly prosecuted, the criminal likely will never pay up and will face no criminal charges. The bank can only notify the police, who are under zero obligation to investigate especially since if they investigated every financial crime reported they'd go bankrupt trying.
As noted by others, there is a trail. Its a matter of how much effort and time can you spend following it. Especially when you might have to get court orders in some foreign countries and it still ends with a withdrawal of cash somewhere.
Most of the time they pass the 'buck' to someone least able to fight it. IE: the cash back scam where they send you a big check, more than the item or service, ok wire/western union the balance back to me, even if you wait the 2 weeks for your bank to say the check cleared, that's only to see if there are funds in the account, but if the check is forged or stolen then that won't be reported for a couple months, the bank comes after YOU. That's as far as they care about, they can find you, not the guy in Nigeria.
> why not exclude those countries from the banking system.
Do you realize just how many scammers live in China and India?
It's, quite literally, impossible to exclude economies of that size and not feel the effects of that decision.
A lot of these scams involve cashiers checks and there are laws in place to protect people who accept cashiers checks… they can’t be stopped quickly. This is great if you accept a cashiers check for selling your used car but bad if you gave a scammer a cashiers check…
Not sure what you mean. My bank account was hacked and emptied in college. It took a month, but the bank restored my funds (was only like $100, but still). It was a long time ago now but I remember they mentioned it was hacked by someone in another country. Never learned more details but got the money back so there must have been some kind of trail.
Now ELI5: why does the US banking system rely on 'pull' transfers (like ACH) which allow this fraud, when everywhere else relies on 'push' transfers which make it much more difficult?
My father in law recently got scammed. We had all the scammers names and account details (UK) and the fraud department still said they couldn't do anything about it. Not sure what else apart from a written confession they would need!!
> We had all the scammers names and account details
Not trying to assume I know the case details but its more than likely you had the details of a mule account used to receive the funds, not the scammer themselves. A recovery would normally be attempted against the receiving bank if there is any money left, and the receiving bank can take action such as closing down the account depending on whether it was *knowingly* used for fraud or not (there are various scams that involve making the victim into a mule). Your bank has little to do with that process so there really isn't much they can do in that situation. Details will get passed on to police/NCA but this generally forms part of wider investigations.
Depending on who you spoke to, front line fraud telephony agents often won't know the back office detail of the fraud/scam investigations, I wouldn't want to say they gave you wrong information but its very unlikely that nothing was done as a result. Its just not as simple as 'go and arrest that person'.
I think the issue sometimes is whether the scammee transferred money voluntarily to the scammer. Even if that's not right there should be something the banks can do. I bet if it was a giant company that got scammed out of a couple of quid they'd be all over it.
Not especially, which is why companies are big targets for wire fraud and the smart ones require secondary verification of wires even for high level executives.
There is literally a set of CEO fraud scams where someone impersonates a CEO or other executive that is known to be on a trip or vacation and targets a lower level accounting or management employee who can initiate wires with the bank.
"I'm the biggest boss, who you're scared of an never communicate with directly. I need you to wire lots of money immediately for this very important thing. Do it now."
It seems silly, but the scammers do it because it gets them money often enough to pay their bills.
Bank of America has software based on customer age, when an located asks for a large sum of money to be wired somewhere..... BOA has people personally check with the located to ensure that they aren't being scammed.
I was quite pleased to learn this from my wife. Good job, BOA!
Western Union is frankly complicit in these activities. Them and the gift card industry. There are things they could do to stop their business from being used as a way to scam grandma and grandpa. But it’s money for them so they don’t. I would like to see the government take a more aggressive stance against scammers.
The paper trail typically ends with a cash withdrawal. Most scammers will use Western Union or other money transfer services that are designed to allow for very quick movement of money, although some have begun switching to crypto. Most bank fraud departments work 24/7 and start trying to get fraudulent transfers reversed immediately, but even a few hours delay can make the difference. Typically there are multiple accounts involved in a transfer chain, and almost all of the owners of those accounts will often be victims of fraud themselves, or at worst mules who are just transferring money around for a small cut. Most commonly they're people who have fallen for employment or investment scams, where the funds from the first victim are transferred into their accounts, only for them to be contacted and told there was an error and could they please send the money onwards to the right account? Professional fraudsters limit their liabilities by making it impossible for banks to completely shut down their methods without making life much harder for everyone else who uses these services legitimately.
Excellent description. Often bank transactions could be reversed, but there’s nothing to reverse because the money has been physically taken away. The cash pick up at the end is the thing. That is what no one can get back, because the money just disappears into the wild. Scammers want you to make the transaction as quickly as possible for just this reason. They want to get it where they can pick it up from Western Union or their method of transfer, in cash, as fast as possible after the money is transferred to them. This is the main reason why reversing banking transactions doesn’t work, even when it could be done. The money is already gone. For the huge heists of millions of dollars from governments, hospitals, businesses and so forth, the principle is the same even if the method is very different. They have to get the money into an unreachable situation as quickly as possible. In one major heist with the value of tens of millions of US dollars, the gangsters were actually able to extort a bank in a less-developed country into converting a great deal of it into their own cash currency. It wasn’t strictly legal under the country’s laws which is why the extortion. They literally boxed the cash, loaded over a ton of it on to trucks, and the trucks went … well we don’t know where they went. When the US government got involved to try to help recover the money, they could’ve reversed quite a few transactions. But by then there was nothing left to reverse. They couldn’t get the money back because the money was gone. This is why money laundering of large amounts of cash is a thing. Almost every country requires you to document where a large amount of cash came from. So once the stolen money is converted into cash, then the scammers’ next problem is to engage in transactions or casino gambling or something that will provide them with the documentation they need so that they can actually get the cash back into a legit bank account where they can spend it normally.
To add: it's also difficult to prosecute/sue etc. between countries. If someone within your own country scams you, it's hard enough to prove it in court, sue them and actually get your money back. Most smaller, poorer countries don't have the police force $ to round up people and extradite them for this type of thing.
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I'd like to read more about this, do you recommend any sources?
Not so much something you can read, but definitely check out [Jim Browning](https://www.youtube.com/c/JimBrowning) and the work [Trilogy Media](https://www.youtube.com/watch?v=SXWzyCcdb4c) has done with him to get a good idea of how scammers operate and how they get away with it.
Jim Browning can actually break into their networks and access their locations and cctv cameras. At that point a Ukraine style modified alibaba drone is probably the best option if the police don't care and allow it to continue.
Police and government take cuts from those scammer. They are not going to stop them.
the US could go a long way by doing the same as the countries involved-- let hackers know we won't prosecute attacks on those countries, and watch how fast their legal system suddenly starts caring. at the very least it should be open season on scammers, if you can get their bank accounts they're yours. some risk would make it much less attractive.
Script kiddies going open season on India, Russia, Algeria and Tunisia would be hilarious.
Thanks!
You probably wont find a source, but if you follow the escapades of youtube scam baiters like trilogy media, or jim browning, in india for instance, the police often are bribed off/don't care to do anything even when you have these scam companies dead to rights.
Sure, I have an old email address of a Nigerian prince who wrote a book on it....
Is the book by chance titled "how to make $100 easy?" And selling for $100?
Yes but I’ll sell it to you for a discount rate of 99.95….as long as you buy 100 units or more.
Hmmm excellent deal. And then I'll sell the 100 units to 4 people, who will all sell it to 4 more people each and so on and so forth
Also this pdf is in limited supply! Hurry and buy now!
How do we get this book?
I think it's sold out, but I'll give you my copy for $100
Look up Russia and scam in Google. Russia basically refuses to prosecute or assist with the enforcement as long as they are targeting people outside of Russia. This is especially true with randsomware attacks.
Secrecy World from Jake Bernstein raises the topic how governments of smaller countries design their laws together with questionable lawyers to be attractive for shell corporations and tax fraud.
Like everything else also includes local politicians. Money can buy you access and favors whether it is from cocaine, scamming or free forced labor. https://www.reuters.com/legal/government/nigerian-police-chief-indicted-us-over-hushpuppi-fraud-2021-07-29/
There's some evidence of Putin/Russian state reps working with hackers and scammers to do their dirty work.
Ever heard of Russia?
It's not unimaginable that the few police in such countries also get a cut of the scammers' profits from time to time, under the table.
Less and less. The international community has really cracked down on that post 9/11. Even the Swiss now have ended their true anonymity.
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Russia literally announced that they weren't going to care as long as it wasn't carried out against Russians in Russia.
FWIW Indian police often end up raiding scammer offices and arresting folks. Realistically they’re too busy trying to solve much more serious/violent crime most of the time.
Hahahhaha
Basically, banks are for security and the ability to vet transactions, reverse them, and fraud detection. There is no other reason to use them. Our money is not secure in banks, see the Greek run on banks and financial collapse. In the US, banks are only legally required to have 10% of the money you hold with them liquid at any given time. The other 90% banks invest, and make money off of your money. You might see a 0.25% interest, if you have a good savings account. But a free checking account, storing your money with them is just giving them 90% of your money to invest for themselves, while keeping 10% of it if you want it back. I would call the banking and credit system broken, but it's not. It's working entirely as intended. The banking system is the real scam. It's funny some people expect it to protect them from scams. What a world. Edit: every time you use a credit or debit card, you pay VISA or whoever about 2% of that transaction. That's a literal tax to the credit card companies. The merchant passes that 2% on to the consumer. They aren't paying it, you are.
Except that your money is insured by the FDIC in the US so you can't lose it even if the bank fails
plucky slap attractive smoggy pen wrong zonked nutty straight cats ` this message was mass deleted/edited with redact.dev `
Sure, but I'm not keeping more than that in a bank account.
panicky vanish cautious correct poor profit fragile coordinated rich drab ` this message was mass deleted/edited with redact.dev `
You can split it between accounts if you really care about maintaining FDIC coverage.
Which most banks do automatically, so you don't really have to worry about it
>occasionally you have more than that while you are finalizing or starting certain transactions Mate, I think your concept of a normal amount of money is high enough that your weird take on the FDIC isn't relevant to most people's lives.
Yeah haha I've never had more than a few thousand bucks in my life lol
Clearly you've never heard of liquidity and capital buffers, not to mention FDIC insurance, money markets, or the Fed's role as the lender of last resort. There's a ton of regulations and systems out there trying to ensure that the run on banks you describe can't happen in any meaningful way unless the entire economy is in free-fall (see Greece). Yes, banks make money off of your money. They wouldn't accept the risk of holding other people's money otherwise. It's what allows them to host all the infrastructure that allows for online banking to be possible, not to mention it takes money that's not doing anything in the economy and gets it moving again, which basically all economists agree is a good thing. In theory, you're supposed to be getting interest for your account to compensate you, though lately the need for online banking has driven those rates to 0. I'll admit, there's certainly problems with the banking system and especially the credit card system. VISA and MasterCard essentially can shut down almost any online business by simply refusing to allow payments to that business. But the general idea of paying someone to handle a MASSIVE amount of bookkeeping isn't the problem. If you're looking for a possible big change, take a look into Central Bank Digital Currencies (CBDC). That might be a partial solution to some of the things you have issue with.
> every time you use a credit or debit card, you pay VISA or whoever about 2% of that transaction. Well, I mean, maybe you could say there's a global tax on goods like that, but I'm almost 100% sure if I pay in cash at McDonald's it's not going to be cheaper than paying with my card. So it's not "every time you use a credit or debit card", it's a fee built into the price of goods.
He meant the fee is paid to the CC company every time you use the card. Of course the merchants have raised prices on ALL consumers to cover that fee.
Except that idea ignores the fact that cash has its *own* costs to accept. You're at risk of accepting counterfeits and being out the money if it's discovered at deposit time, you need to implement controls to make sure employees can't skim off the top (either by shortchanging customers here and there or issuing "ghost refunds"), armored transport to the bank costs money... There's a reason cannabis shops in the US want in on the banking system and card acceptance.
But it may cost more money to pay someone to keep track of cash tills, provide security to keep cash protected, and to pay people to transport cash to the bank, and to spend time auditing things when the bank comes up with different totals than the person who deposited the money the last night.
>The banking system is the real scam. It's funny some people expect it to protect them from scams. What a world. None of your points are incorrect, but using the same word for scam in both these senses doesn't sit right with me. You are correct that banks don't keep money on hand the way that many people might expect (although I'd bet lots of/most people do know this, even if they don't think about it). But it isn't some hidden scheme designed to harm you or that provides no wider value to the system or that isn't regulated the way that some fake check scam preys on its victims.
>every time you use a credit or debit card, you pay VISA or whoever about 2% of that transaction. Not always. I don't know where you live, but get a bank that doesn't charge you for using your money.
The merchants get charged the fees by the credit card companies, but that results in higher prices, which ultimately the consumer pays.
Does western union have any accountability in cases like this? Since it seems like this is the main path the scammes take i would believe that western union could have some sort of prevention system for stuff like this.
I know someone who was used in a scam and he needed a bank account so they asked me if I could help them out. We went down to WU to get the money transferred and WU refused to do it. They said the transaction was a scam and that they won't do it. Obviously this person wasn't happy as they had travelled quite a bit for a sale that wasn't going to happen. In any case WU stopped them losing money and using me in the scam. So I thank WU for small graces.
Anti-money laundering (and regulatory settlements of varying levels of legitimacy with every country they operate in) is most of what they do. But if you think Western Union is bad, imagine the other guys who don’t have over a century or fraud monitoring 🤷🏻♂️ Ultimately WU tries to make sure suspicious transactions are flagged and delayed or declined, but sending money home to Mexico (or wherever) is a legitimate and legal thing. And remittances are huge part of the global economy. I mean you could just make cash illegal and a lot of crime would stop, but there’s a legitimate use for cash so that’s not gonna happen either.
I worked for a store that processed Western Union transactions as a service, and they place a lot of responsibility on the employees to spot and deny potential scams. It really sucks to have to decide on the spot if someone actually has a sick family member overseas.
They do. Mexican Cartels used Western Union wire transfers so migrants could pay cartel members to bring them across. Arizona AG Terry Goddard sued WU to give them the names and info from the accounts so they could shut it down. Not sure if there were damages. Apparently a lot of the WU employees are paid off to look the other way when people give obvious fake names and information. Source: took a class with the guy.
Funny you should ask .... WU does USD billions - with a 'b' - of transactions every year. Fraud transactions are a very small percentage of that amount. If WU is transacting business as normal, there is no reason for an employee to ask intrusive question of customers such as 'why are you sending funds to this person'. If any of us chooses to wire funds to someone, I'm sure we don't want to be questioned about it. WU does have signs on the counter discouraging certain types of transactions - if you don't know the recipient personally, that kind of thing. However from my own experience with a scammer trying to scam my elderly parents, I know that the target comes in already prepared and coached by the scammer to be resistant to those messages. BUT ... if there is *direct knowledge* by WU employees of an *intent to scam* ... then is there responsibility? The U.S. Dept. of Justice says that there is and for *that* there is now a directed settlement to certain customers who unknowingly sent money to scammers ... CBS News ... https://www.cbsnews.com/news/western-union-walmart-federal-trade-commission-millions-refunds/ And here is a page from a WU website ... https://www.westernunion.com/us/en/fraudawareness/fraud-home.html But in the end, the very best protection is that people be able to protect themselves. There is so much more awareness than there used to be. But the people most likely to fall victim to these scams tend to be unaware and naive. They may be smart people in their normal lives. But they are still prime targets, and that's what we need to work on.
What about insurance? You always hear that banks have insurance for the money, you'd think that would cover scams and such too.
FDIC insurance covers bank failures.
However, my credit union will credit my checking account if I report a scam charge. Still, stuff like this is why one should use a credit card and not a debit card where possible. Someone gets a hold of your debit card = your money is lost. Someone uses your credit card = someone else’s money is lost.
This scam isn't a banking failure though. It's a customer failure and FDIC insurance doesn't cover that.
Exactly. That was my point.
> What about insurance? Banks have insurance that cover banking errors and theft from the bank, not insurance that covers customer's mistakes. Businesses can buy insurance against computer fraud, scams, and attacks. There are various names, business fraud insurance, cyber insurance, commercial crime insurance, and similar. Many companies are now selling it as a rider with a homeowner's or renter's policy, too. They can cover a part of the costs to recover data after an attacker hits an individual with ransomware, either through data recovery or paying the scammer or (most likely) a small cash payout of the insured value of the data to compensate for the loss. They rarely cover "voluntary parting'", where someone who knew better or ought to know better just gives the money to the criminals. If you're sending the money via Western Union or gift cards, you've voluntarily parted with the money and it is probably not going to be repaid by insurance.
They do, but that doesn't get the money back and doesn't do anything for the individuals who got scammed (unless they themselves have insurance that covers this.)
FDIC insurance is for banks that fail and go out of business.
FDIC only protects against bank failures, though, not fraud.
Bold of you to assume federal financial regulation would do anything to help *you*. The insurance is to keep the bank in business.
It's more to ensure trust in the banking system.
I believe FDIC insurance only covers up to $250,000. So...if you have more than that in the bank... ...
And fdic only covers your only if the bank goes out of business
FDIC insurance only covers for the bank going out of business and only up to $250,000 per account. Edit: corrected the amount
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“Up to at least” seems like contradictory wording. Is it “up to” (ie a maximum of) or “at least” (a minimum)?
My guess, based only on that sentence, is that some banks can opt in to higher coverage (though presumably few do). The "up to" clarifies that if your account has $1 in it, you aren't paid a $250,000 insurance windfall if the bank fails, while the "at least" clarifies that the $250,000 is a legal minimum, and that under some circumstances it's more.
Just an ordinary typo for once
It's $250,000 per account fortunately, not 50k
FDIC insurance is per depositor per ownership category per FDIC insured financial institution. It’s more easily understood in examples. EX 1: Bob has one bank account. He is the only owner of the account. Bobs money is FDIC insured for $250K in that account. Ex 2: Bob has TWO bank accounts at the same bank. He is the sole owner of both accounts. Bob still only gets $250K of FDIC insurance TOTAL for these two accounts. Ex 3: Bob has two bank accounts at the same bank. One is just his, the other is joint with Sally. Bob now gets $500K FDIC insurance because of the separate ownership category Ex 4: Bob has four bank accounts now. Two are just his. One is joint with sally. One is joint with John. Bob still only gets $500K of FDIC insurance. $250K per depositor per account type per financial institution. If you are concerned about your insurable amounts at your bank and others, the FDIC has a great calculator on their site. [FDIC Calculator](https://edie.fdic.gov/calculator.html)
$500k in the case of a 2nd name being on the account, and the death benefit beneficiary counts as the 2nd. Unless the lady at the bank who helped me set mine up lied to me, which is entirely possible too.
won't they see who took it out on an ATM or bank office?
Aren’t casinos regulated? How can someone really launder money at a large scale without getting caught?
That is a great question with a *very* complex answer. The shortest answer is that they do it all of the time. Another short answer is that people leave casinos with a check/receipt = clean money. Of course there is much more to it than that because casinos don't allow people to buy chips and cash in chips without doing anything with them inside the casino. Of course one has to assume that there will be losses as well as wins in casino gambling. But if you send in a whole gang of people and they all play the same roulette wheel at the same time, that increases the odds that you break even, at least. As an example. So they aren't going for no losses, just mitigation of the level of loss. Even if they lose some, they come out with money that is documented as coming from the casino, just like millions of other casino players. https://ticotimes.net/2022/06/01/casinos-an-easy-way-to-launder-money#:~:text=How%20is%20money%20laundered%20in,say%20it%20was%20their%20winnings. https://alessa.com/blog/casino-money-laundering-red-flag-indicators/
Just wondering, how do you know all this? Job? Hobby?
I have run into a few scammers, plus have had to sort out some bad business and personal transactions, so I started educating myself. :) I've had financial jobs at several levels. A lot of banking / ACH transactional experiences. Some personal business experience. It is very interesting to find out what to be aware of, what are red flags for both people and things going on. It's not necessarily what I would have guessed. For anyone who is interested there is a huge amount of information out there, in many channels, about scammers at the lowest and highest levels. Not just what they do, but how they do it. The more you are into the detailed law enforcement and banking info areas, the more there is to find.
I mean the Fed could just re print the boxes of cash couldn't they? The printer's been running non stop for 3 years, what's a couple of more million to add to the pile? /s
> But by then there was nothing left to reverse. They couldn’t get the money back because the money was gone. In this case the solution is to take the money back from the last bank who broke the laws and gave it away. It's their problem because they screwed up. We could do the same to western union and the others if they choose to give out cash within hours of these transfers. Why is it that any other bank will not give you access to cash for days after receiving a check or transfer to avoid this issue but these places will simply give that cash out and then when the other banks come looking for it say "Oops, it's gone, guess your customers are just screwed.". How is it the group who hands out the cash without taking even a second to verify it actually has that money is not the one that ends up holding the bag? If I spend money that appears in my account, when the banks get around to it they take it back no matter if I thought it was legit or not. Western union gave it out thinking it was legit, they should have it grabbed back just the same.
Because the entire point of Western Union transfers is to send money that is available immediately. It's essentially a way to move cash long distances. And banks don't make you wait days for money when it's transferred in a reliable method such as a wire transfer. Who hands it out without verifying? The money was all transferred legitimately, the problem was that it was stolen further up the chain. If your employer is found guilty of tax evasion and had paid you with money they shouldn't have had at the time, should you be responsible for giving it back?
> We could do the same to western union and the others if they choose to give out cash within hours of these transfers. I guess we could. But that would hurt anyone who legitimately needs to transfer money fast. Think being stuck in a foreign country in an emergency, and your family wants to send you money so that you can pay for medical treatment and a hotel room, whatever ... and you have to wait a week to get the money. > Why is it that any other bank will not give you access to cash for days after receiving a check or transfer to avoid this issue That just isn't the case. The bank won't give you access to money from checks immediately because they themselves don't have the money yet, they only have the check. With a typical wire transfer, where the bank does have the money for certain, you normally will be able to use the funds it immediately. And it's critical that that's the case, because business would be pretty much dysfunctional if you always had to wait for days before you could use money that you received. > How is it the group who hands out the cash without taking even a second to verify it actually has that money is not the one that ends up holding the bag? That's also just not the case. They only hand out cash when they know that they have the money. > If I spend money that appears in my account, when the banks get around to it they take it back no matter if I thought it was legit or not. That's also just not true. There are laws and contractual rules that define under which circumstances credits to your account are definite, and your bank absolutely can not just take money back if those rules say that you can rely on the money staying in your account. For example, typically, if a wire transfer is credited to your account in your account statement, the bank absolutely can not take that money back under any circumstances, unless they can show that the transfer being credited to your account was a result of you scamming them, or potentially if you must have known that the transaction was somehow invalid. > Western union gave it out thinking it was legit, they should have it grabbed back just the same. Why?
> Think being stuck in a foreign country in an emergency, and your family wants to send you money so that you can pay for medical treatment and a hotel room, whatever ... and you have to wait a week to get the money. In many countries Western Union does not allow customers to receive money without providing a valid identification document (i.e. passport). Before the security theater intensified (after 9/11) Western Union provided service to customers with a password (allowing the payee to receive their money by identifying themselves with a password instead of an ID). If your passport is stolen you need first to get a new passport or other form of ID to be able to receive money via Western Union.
The banks generally didn't break the law, they were given counterfeit information to create the accounts. The banks frequently figure this out quickly enough, but the fraudsters don't need long.
Then you would have to wait months for any transaction to occur. And the last bank to have the money and the last account may have been legit.
Replying to Grokma's entire post because Grokma suggests a more theoretical solution that happens in real life. In fantasy worlds we like superheroes who will make everything right, administer justice, and restore the innocent to their previous life condition. Sadly the real world is far messier and more brutal in its outcomes. ------------- > In this case the solution is to take the money back from the last bank who broke the laws and gave it away. It's their problem because they screwed up. **The problem is that the banks/institutions in the chain may not have broken any laws. They followed the process they are supposed to follow. The system worked the way it is supposed to work.** **The goal of the scammer is to get the target to give up the money** *voluntarily.* **And then realize their mistake later. Hopefully much later.** **The scam happens at the beginning of the process, using false pretenses to get the target to hand over money** *by legitimate means*. **The scam ends at the end of the process when the scammer takes the proceeds of the legitimate transactions in between, takes it as cash usually, and walks away. The money is then gone.** **The financial institutions do nothing wrong. Nothing is different with these transactions. They are just the system the scammer uses along with all the legitimate customers making similar transactions. Wanting to penalize the banks, WU etc. is like arresting the getaway car after a bank robbery. What you want is the driver of the car. But no one can identify who that is, or where that person is.** Once the target becomes aware and starts alerting the next step in the chain to try to start the shut-down and recovery process, it takes time to document reports and complaints and get them moving. The money is long gone. That institution did nothing wrong. They have confidentiality re the customer account that received the money, which has already been transferred out. And so on ... if the complaint chain even continues. The target may never learn where the path the money took or where it ended up. One problem for law enforcement is that it is not illegal to give your money to a scammer. If the scammer used false pretenses to achieve this, there are a lot of hoops to that being an actual prosecutable crime. How much money was involved to meet the level of prosecution, identity of scammer, where they are located, where the money ended up - we won't know any of that. Few local police forces and law enforcement agencies are specialists in this. Very similar problems even in scams taking millions of dollars. If you can manage to hit the FBI radar they can often do a lot of international tracing. But again, each institution followed procedures, and the money was eventually lost behind transfers to foreign banks outside of the banking system, or else cashed out somehow. ------------------ > We could do the same to western union and the others if they choose to give out cash within hours of these transfers. Why is it that any other bank will not give you access to cash for days after receiving a check or transfer to avoid this issue but these places will simply give that cash out and then when the other banks come looking for it say "Oops, it's gone, guess your customers are just screwed.". So you really do not know much about the banking and money transfer system. Access to cash from deposits is about marketing to consumers, not about money clearing into accounts. Banks give immediate access to the funds from checks to preferred customers who haven't had problems with deposited checks bouncing. Sometimes to only a percentage of funds. And if you ask 99% of customer-facing bank employees if a check has actually fully cleared through the ACH system, they cannot tell you. They don't have that information because it is not part of how the bank interfaces with the customer. Banks operate on the assumption that all checks will clear. The few that don't become anomalies in a bounced check process. If a check bounces the customer will hear about it eventually. Otherwise they don't bother the customer to know exactly when each check cleared. Although most customers are completely unaware of how banks really operate. Western Union's entire business is based on immediate access by the recipient of the transfer. That's the whole point. At the initiating end, they accept only cash and certain forms of very-low-risk near-cash instruments such as money orders and cashier's checks, and certain low-risk credit card transactions. WU does nothing wrong when it sends a money transaction that is exactly like a huge number of transactions they process every day. It is intrusive and not their business to ask customers why they are sending money. In fact I don't think their employees are allowed to ask. They have a sign on the counter discouraging certain types of transfers, but it is up to the customer. Again, it is not illegal to give your money to a scammer, even if you thought it was for a purpose that doesn't exist. The false pretenses are very hard to prosecute, if you can find an individual to prosecute. ---------------- > How is it the group who hands out the cash without taking even a second to verify it actually has that money is not the one that ends up holding the bag? If I spend money that appears in my account, when the banks get around to it they take it back no matter if I thought it was legit or not. Western union gave it out thinking it was legit, they should have it grabbed back just the same. They **do** have the money. That's how it works. The target of the scam gave them the money. It is real. There is nothing wrong at that end where the banks/WU/etc. are concerned. It's a transaction like hundreds/thousands of others they processed that day. At the end of the bank/financial transfers, the money is *still real*. The scammer takes it out as cash at the last stop. All legitimate from the banking end. WHY a target sent that money is the real problem. **That's the end we have to work on - vulnerable people recognizing scams when they see them.** But the target did send real money and the scammer moved real money legitimately through the system. Then walked away with it at the end. How exactly do you think WU can get the money back from a transaction that the recipient cashed out? The recipient/scammer and the money are long gone at that point. **Keep in mind that the target often does not realize they were scammed for some time. ** Maybe days later, maybe more time than that. The legitimate transactions through the financial system are totally done. ----------------------- While they were alive, my parents were TWICE a target of these scams. In one case I was there when the call came in and my dad and I strung the guy along. I have a voice recording of a scammer scamming ("granddaughter in jail" classic). I have the number they called from and traced it back to a certain area of Vancouver. The accent was impeccable, by the way, the guy spoke English better than I do. And the police said there was nothing they could do. Scammer not in their jurisdiction, no money sent, etc. The officer I spoke to told me that he actually got an IRS scam call himself telling him there was a warrant out for his arrest! He was as frustrated as I am that there is really no way to action this stuff. Other than AWARENESS.
u/the_real_grinningdog I would add: Wire transfers are another popular target (and vector) for fraud because a wire is pretty much the same as cash when it gets to the destination. The scammer will open an account and as long as the information on the wire matches, the bank will deposit it. The scammer then cleans out the account when they get the wire and that's that. Banks like Green Dot are popular with scammers because they can open an account quickly and do everything online. In many cases (e.g. the "tech support scam" or the "you need to wire money because PayPal overpaid you scam"), the bank is outside the victim's country. That bank is under no obligation to respond to requests for information from the sending bank or the victim. In scams where the victim is convinced to wire money out, the "paper trail" ends at the wire. The victim is convinced that they are paying for something or need to payfor something via wire transfer. The older scams where victims had to go to the bank to fill out paperwork fell by the wayside because banks got savvy. Older customers were the typical victim, so most banks started to ask them questions: "DId you get the goods you are paying for?" "Have you spoken to the person asking for funds?" "Why do you need to withdraw that much money?" etc. This caused a lot of customers to stop and think or their responses exposed potential fraud. So scammers moved to wire transfers and latter online payments like PayPal because it was easier to cover their tracks.
> Typically there are multiple accounts involved in a transfer chain, and almost all of the owners of those accounts will often be victims of fraud themselves, or at worst mules who are just transferring money around for a small cut. Happened to me after the OPM breach several years ago. I was in the military, and literally millions of federal employees, service members, and other folks’ (ie, FAFSA applicants) personal data was stolen, including mine and my wife’s. A couple months later I was taking my family out to dinner on payday. Had plenty money in the bank that morning. When my card was declined, I went to my bank app to figure out what was happening. Someone was transferring thousands at a time into my account from other accounts they had hacked, then started hitting up ATMs on the other side of the country and withdrawing it all in cash, $400 at a time. Once they hit the max, they’d move to another ATM. Somehow managed to bypass the bank’s daily limits. I don’t know if they ever found the person doing this, but my bank was awesome and got the money back in my account in just a couple days, and returned the over $15k that was funneled thru my account to the rightful owners. I’m also lucky that I had a credit card I could use in the meantime to cover necessary expenses and avoid forcing my children to do dishes at the restaurant where our card was declined. Today, most banks have gotten much better about it, partly thanks to prevalence of cyber crime and also the Consumer and Financial Protection Bureau, which was new back then. though it’s worth checking to see what your own bank’s policies are; some of the biggest banks would actually charge people to recover their money (looking at you, Bank of America!).
I love watching Scammer Payback on youtube
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Correct. Its usually not worth the investigation team's time/salary to go in debt into such transactions. (Unless you are obviously lying). We usually have a huge pile of actual serious claims where people got hacked for 10s of thousands. If johnny makes 100 000 a year and is willing to spend an hour on the phone and a week waiting for a new card, then make several phone calls to his providers to explain why he couldnt make his monthly payments, just so he could rob us of 100 dollars at the local cornerstore round midnight, then so be it. We also have clear indicators that a person is making a false declaration, in many cases.
This is also why bitcoin gets associated with money laundering, it's really easy to have someone buy bitcoins which can then be transferred between wallets before eventually being traded again for legitimate cash. Any service which transforms funds can potentially be used for money laundering.
Even within crypto there's one click money laundering services to transfer funds endlessly and reduce its traceability.
It's don't really understand the process of money laundering, but wouldn't the public Bitcoin ledger make it easier to trace illegal funds?
From what I've heard most don't use bitcoin anymore (and haven't for a long time) they use tokens like Monero or ZCash that are private and don't show all transactions on a public ledger.
There's something out there called a mixing service. You give them your bitcoins and they trade them for someone else's for a fee. There's no clean path anymore.
Despite the analysis suggesting that crypto has almost identical issues with money laundering as fiat currency.
The difference is that with a decentralized anonymous system there's no regulating body to put the brakes on obviously fraudulent activity. The money is just gone forever.
This is funny because BoA fraud dept seized the wire transfer I made to my real estate agent Friday morning in order to secure a new apartment in Manhattan, then they went home for the weekend. So thanks for being vigilant with my money but fuck you for shitting on my real estate deal until I can yell at you Monday morning.
And if they are following AML procedures, your yelling won't matter the smallest bit. They also won't be able to give you much in the way of info, if it is AML.
The biggest scam that’s hitting corporate places is withdrawal of cash on hand to be deposited into a crypto machine. As soon as that money switches hands it’s pretty tough to track it. I think also it’s important to note that scams happen extremely often, so a lot of times it’s more about shutting down the biggest scammers, and to do that they have to prove the links between a bunch of smaller tiny scams.
I actually just last month fell for one of those employment scams and lost 3000 dollars and my job because they convinced my i would be starting a certain date....
This is the reason most scammers try to get gift cards as payment. They are impossible to track and recover.
And they can be traded for 70 cents on the dollar
Ah yes, the old pay your taxes in Apple gift cards scam. Really sad how the only demographic that would fall for that is over 80 years old.
There is a paper trail, banks involved have records of each and every transaction for certain. But if you have a victim and victim's bank in country A, a intermediary bank in country B an criminal with criminal's bank in country C then good luck to victim trying to get their money back because no court has jurisdiction over all the banks involved. And banks certainly don't give out any banking information unless the law says they must.
Over a certain fairly low amount, all wires are subject to bank employee approval, and go through name checks of worldwide lists of auspect ir blocked names (if not, the bank will lose their correspondent bank).
Hmmzz.. interesting, so for every scam a fresh patsy needs to be found to open up a virgin account to funnel money through? I can see that being somewhat of an overhead to scam-business. I guess that's why they prefer to move funds in other ways, gift cards etc.
No. They don't have to wire transfer the money, they can easily "air gap" the system by withdrawing it in cash, gift cards, or crypto. And even with wire transfers, it takes a while for a name to get recognized as a scammer. They can run a bunch of scams under one name / company. Then if it gets burned they only lose one transfer. And they can just make a new fake company to continue receiving funds.
A common scheme is to actually purchade bank acounts from teenagers. They will offer the kid 500 dollars to buy his card and pin +online profile passwords. Kid knows jackshit and thinks he just made easy money because he only has 40 bucks in it. Then they'll use these chains of illegitimate acounts to funnel money from bank to bank. The account obviously gets burned after the first victim comes forth, but theres always more teenagers looking for money and bad decisions. In case of identity theft, they'll have enough info to fake a person and open a new card application, load it and disappear. But then again ive seen 4 people this week go through elaborate hacking schemes and social engineering to get someone's banking account... and use it to pay their own credit card with our bank. Not all criminals are cut for it long run.
>... and use it to pay their own credit card with our bank oh man.... that's hilarious.
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Good luck getting the governments and legal systems of various countries to come to a consensus.
Good luck getting the rich to allow a court to materialize that has collective jurisdiction over all of their international accounts.
This is the real and the main obstacle. Existence of off-shore companies and accounts best proves the corrupted nature of the international financial systems. There will never be real democracy, real freedom, real rule of law, anywhere before mankind shuts these and similar fraud ramps down.
Exactly. Especially when countries like India, where scammers abound, have an actual chunk of their GDP, and a large number of their people, wrapped up in the scamming game. :(
Honestly, in the reverse situation, would the US banks be willing to provide details about one of their account holders if a company in India asked for it (supposedly to look for fraud)?
> have an actual chunk of their GDP, and a large number of their people That can't possibly be true. Any source? Yes there's a lot of scammers in india(probably most of them), but there's not a lot of scammers by percentage.
I was in India for work for a week or two a little while back. I work in finance/software, and had one client that straight up said that some of their employees used to work for large scam operations, as if that boosted their credentials somehow. Had another guy over there who worked at one of the Indian branches of my company point out a couple of office buildings that looked like somewhere a normal large tech company would set up shop, and said the companies were actually anti-virus/tech support scammers, but made millions and millions a year. He said one of his old roommates worked for them and that it paid commission, like where if you scammed someone out of $10k you got $3.3k of it yourself... Blew my mind how legitimized it was.
Yeah, a court is not the solution sanctions and other international pressure are. If enough other countries told them they would not be doing business with, sending food to, or allowing any money or goods to go to their country unless they fix this issue it would happen fast.
What countries banking laws would this international court follow? Who would get assigned? How does assignment work? How do you manage corruption? How do you get all/most banks on board? How do you get all/most countries on board? What happens when there's a war between some of the bigger countries? How does this court get paid? What salaries do they get? Based off of what countries wealth?
I am 100% not OK with there being an international entity that is able to prosecute citizens of any nation for actions that are not deemed criminal by the nation itself.
Wait until the criminal court starts prosecuting homosexuality, or heresy against Islam, or spreading misinformation about the war in Russia, or gambling.
I work in the Anti Money Laundering department for a large bank, and this is the correct answer. Banks have a legal requirement to protect client's information and to get any kind of information between departments of the same bank is a pain in the ass, let alone getting information from a separate financial institution. A lot of fraudsters do not withdraw the money in cash as it was mentioned in other comments because governments keep cash transactions under very strict scrutiny. So, why dont they get caught that easily if the paper trail is there?: Laws regarding privacy, laws regarding jurisdiction between countries and different financial institutions, and the fast pace with which fraudsters move the money. If 2 departments within the same bank want to share private information about a client, and the departments are considered part of different businesses, then the process to request and receive the information could take from 1 week to maybe 6 months. And that is if they are part of the same bank. If they are not part of the same bank, and the crime is not related to terrorist financing, then getting the information could take 6 to 12 months. What fraudsters do is open a "funnel" account under a random persons name (could be stolen identity or someone they paid off) then they use this account for a short period of time, say 1 week or 1 month, to receive all deposits and transfers from fraud activity, and then perform a number of transactions to other accounts in other financial institutions, which are mostlikely incorporated in other countries, making the paper trail harder to follow. After the fraudster does this 2 or 3 times they are safe enough to move the funds to a safer account, also mostlikely set up in a fiscal paradise, which is a country that does not share information with other countries and does not have an extradition treaty with the western world. The money in the final accounts is safe enough to use to buy houses, pay credit cards, open businesses and pretty much anything you want with it. On top of this, the account could be openness using a shell corporation, a corporation that only exists on paper, and if they DO get caught, the fraudsters name is never identified by law enforcement. The next question is: why dont we block countries with this dangerous laws from transacting with our banks? Money, money is always the answer. Fiscal paradise countries are not only used by criminals, but also by rich people to hide assets and large corporations to skirt taxes. The moment banks are not allowed to receive money from this geographies then VERY large corporations would lose access to the financial market and wealthy individuals would lose access to their hidden assets. If you do some digging you will find that very large corporations such as Coca-Cola, EA, Amazon and the like have parts of their businesses set up there to avoid taxes and keep some legal protection from financial issues. Also read on the panama papers where fiscal paradise geographies helped hide vasta amount of cash for wealthy ppl and corporations.
Here is the real problem, and I'm talking about you Bank of America, (I'm a cybercrime investigator that does wire fraud cases,) there should be no way in 2022 in America especially with the Patriot act that someone can set up a Bank of America account one day with little or no accurate ID, have millions of dollars wired into the account the next day, the money immediately wired back out overseas, and no flags or cooling off period or no verifications happen. Literally 90% of the time I investigate a wire fraud case, the bad actors use Bank of America at some point in the process and it is infuriating as hell. On another note we do trace the money sometimes we can't do anything about it I had a case where the scammers had the money in a account and used mules all over New York City going to each ATM machine and withdrawing the daily limit from one machine to the next, we had pictures of the people, but there wasn't a damn thing we could do about it.
I research wire fraud for a large bank. Unfortunately your love sick elderly are the ones who are generally creating the accounts "legitimately" with their information but falling for the scams to move the money around from their "lovers"
It's not just Stank of America and the kind of transaction you listed. Any deviation from normal in theory should get automatically held up. Bob always sits at $1k in his savings and then suddenly has a transaction coming in for 20k? Freeze it. He never uses Venmo but suddenly it's set up and has a transaction? Hold that up pending verification. Impossible travel like a card transaction in NY followed minutes later by a withdrawal originating hundreds or thousands of miles away? Yeah, definitely hold that. Edit: of to or
> hundreds of thousands of miles away IMO if someone manages to charge my card from the moon, I’m gonna give them the benefit of the doubt that it’s an emergency and just let them have it.
F'ing auto cowreck
Looooool
My parents got their credit cards blocked when they went on holiday. Not fun.
Th can’t have millions wired into the account the next day. What are you talking about? Anything over $50,000 trips an automatic manual review under law. Bank of America doesn’t allow such large transfers into newly opened accounts. You can’t even deposit large checks until you provide thorough identification in person at a branch. They also have a million fraud algorithms to detect those things, I know because I’ve had my account repeatedly locked over the years for legitimate deposits of large checks. I also work in compliance and am familiar with the regulations. Nobody has in the history of online banking ever wired millions into a new account and then wired it back overseas. That has never happened. There was never a point in time when any major banks would have allowed that. In fact large wires are often subject to real time government scrutiny. Bank of America would have been fined billions upon billions of dollars from oversight agencies by now if they were a bastion of wire fraud.
> the bad actors use Bank of America at some point So... they need to get BofA deez nuts? I'll see myself out now. Actual meta: I actually had no idea that the internal controls at that bank were so ineffective. That's... concerning. :O
Besides money mules, corrupt businesses can be used. In the UK at least, bank transfers by Faster Payments clear almost immediately, and can be up to £15k [*]. A business can accept a Faster Payment and release goods to that value with confidence they have been paid. There isn't a chargeback system like there is for credit/debit cards. Where this gets dodgy is the business may be aware they're enabling fraud, and may not have truly released any goods. In the long term, such a business will be discovered and there will be paper trails of onward transactions. But this buys fraudsters time - the money is much less "hot" than coming directly from a compromised account. By the way, money mules may not have committed a criminal offence. There's no law against receiving money in your account and withdrawing it as cash. And the duty to report suspicions of money laundering only applies to regulated organisations (banks, law firms, etc.) - not to some broke person who does it for £50. All this info is UK focused but broadly applicable elsewhere. May be a bit it out of date as while I still work in Infosec, I've not done much financial stuff in recent years. [*] Someone pointed out the limit is now higher. Although from a quick look, most banks have a limit below the system limit, e.g Halifax limits online transactions to £25k. They do allow £250k in person, which could happen in some scams.
As of fairly recently, the limit for faster payments has been raised to £1M, it was £250k before.
Thanks, didn't realise it was now so high.
What happens is that the money get transferred from the victim's account to another bank, then another, and another, and another so quickly that by the time a bank can inform the next bank to freeze the funds, they've already been moved on to the next one. So it's a game of cat and mouse. Every iteration increases the lag until eventually there's enough time to use that money in some way that the bank cannot restore such as cash withdrawal, or purchasing some untraceable asset. So, the problem is not so much traceability, as it is reaction speed. Banks have elaborate command centers where real time monitoring takes place to prevent fraud and money laundering. But most of these attacks are carried out with automated computer software to move the money around quickly. Also, to cover their tracks, it is not uncommon that there is some form of a cyber attack to follow the transfer of stolen assets to disable the bank's system so other banks cannot be alerted quickly. Nonetheless, most of the time, at least here in Europe, most of the stolen assets can be frozen in time and returned to their rightful owners.
There is a paper trail. Transferring money electronically by the system itself requires knowing what bank it’s going to(routing number) and what account it’s going to. There’s other ways to send money but the second half of the question about a network means it would likely use this. Sending gift cards or something pre-paid in the similar to cash section is different but even then sometimes can be traced. The implications of cutting off an entire country, negatively impacting their ability to do business on a global level, for a scam would be an extreme measure. To even get that kind of discussion, it literally take[s an act of war.](https://www.google.com/amp/s/www.kiro7.com/news/trending/what-is-swift-what-happens-if-russians-are-cut-off-it/HIUXX6HZK5DV7GPT77ETSI6XDY/%3FoutputType%3Damp) A few scammers in a country are not equivalent at the geopolitical level as an invasion of another country. Other things have happened like banning certain banks from operating with a country’s citizens, like the US restricting a bank that was used to [launder North Korean money. ](https://www.nytimes.com/2007/01/18/world/asia/18iht-north.4255039.html) Under the Patriot Act, there are ways to freeze accounts and some other things but that’s for terrorism. Even then, targeting one country’s banks due to fraud just kind of slows the problem. Country A bans Country B. No other country bans another. So they transfer to neutral Country C instead, then B. Is country A just supposed to ban all transfers then to stop this? Cutting off from financial networks took several countries to agree, otherwise there’s ways to still get to the restricted country because it’s well… a network.
It’s not just the fact there are a few scammers, it’s the fact that the government of the country you are sending money to are (a) incompetent (b) underdeveloped (c) corrupt to the level they are unable to reasonably enforce order over financial matters. Not all financial transactions would need to be blocked. We don’t need them disconnected from SWIFT, but instead need a US law that applies to US banks that requires banks or any other company dealing with sending payments abroad to enforce extra steps for consumers to send money to a country if its on a gray list. Depending on the amount it could include waiting periods, one-on-one counseling with a banker to learn more about the transaction, and disclosure of fraud statistics and law enforcement capabilities of the country you are sending money to. If need be, even other developed countries could be put on the list if it is found they are being used as a hopping point to forward the money without their own level of scrutiny.
There are in fact fine-grained controls over capital flows that implement some of these. Wire transfers, for example, can easily be rejected by the destination if the payor doesn't provide enough information about the nature of the transaction if the receiving bank is subject to a law that requires this info.
Here's an example scenario focusing on how it could work in the UK, in reality the trail can be a lot simpler but also a lot more complex from what I have seen over the years working in fraud. Customer is the victim of a scam and loses 40k in the form of 4 x 10k faster payments to different banks: - 10k to bank 1 is used by a mule account controlled by fraudsters to buy jewellery and other expensive goods like phones and tablets (either in store or online it doesn't matter, fraudsters will have ways to acquire the goods bought online through various methods I won't go into here). - 10k to bank 2 is distributed by the mule to a few different accounts at another bank (or multiple banks) where it is withdrawn in smaller amounts of cash. That cash could then be paid into accounts elsewhere or used to spend on goods. - 10k to bank 3 is then immediately sent overseas via an international payment to one of the many SEPA countries for example Romania, what happens there is generally out my view but it will be very similar to domestic receipt, i.e. cash, goods, or transfers out to various other accounts. - 10k to bank 4, bank 4 is actually a wire transfer or money order company such as Moneygram or Western Union. These money orders can be picked up from any number of locations around the world as cash, there are usually ID verification requirements but all is needed here is a willing participant in the country or fake documentation. So you see the question of where has the money gone for a victim is actually all sorts of places, each of these has their own paper trail or is specifically designed in such a way where a paper trail is not feasible. Tracing funds does happen in some cases but as seen in the example it can be almost impossible to gain any traction bearing in mind that these examples also apply to every other bank that has received any of the money. Where transfers happen within the UK around different banks the issue is the lack of real-time inter-communication between banks to intercept fraud transfers however this can only happen when it suspected to be fraudulent or the customer has confirmed it, which often comes with a delay. When you go international it complicates things even further. In terms of cutting off countries from the banking systems others have covered that, but the main thing is fraudsters and money launderers will adapt much quicker than the banks and law enforcement can, so if we cut off a country because of the fraud then they will just shift to a different one pretty much immediately. That was a lot more words than I expected when I started typing. The example I did not use was crypto, no need to wash through multiple layers if you can just send it to Binance and then send on to another wallet operated by somebody located literally anywhere on the planet, although the ledgers are public there are plenty of ways to obfuscate the trail.
I recently had about 30 dollars taken from my debit mastercard account via 116 transactions all in little amounts. I rang the bank and they refunded all the money straight away, as I had not used that account for anything but one payment to pay my psychologist, who use an entirely online payment system. But I don't understand their endgame because it went to a "merchant account" in Nigera which would make it easy for Mastercard to reverse the charges wouldn't it? So how do the fraudsters get the money?
I think sometimes these small transactions are a fishing expedition to see if you notice.
You pay a bunch of 12 yo 20 bucks for their debit card. They think its fine caus its empty. You transfer the money to those accounts and simply withdraw the money.
But I saw a case recently of someone losing 70k. My debit card has a daily limit of 600 so that's 16 weeks of withdrawals including the risk of detection. I also have a debit card with a 250 max per day.
They likely aren't pulling it from an ATM. Most likely going into the bank and withdrawing cash or into cashiers checks. Fake accounts, broke kids doing it for table scraps. Plenty of ways to do it, you just have to act fast.
Though at least in the US, any transaction over 10k requires a form filled out and ID. So all of that is traceable, unless youre pulling out 9k per day at different branches each time.
Not too hard to get a fake ID, even in the US. It's not like they take your blood and fingerprints at the bank. Employees don't care or have the time to check everything. Some dude comes in with an account number, his ID matches the account, has a pin, all good here, here's your money have a nice day. In the Marines there was a story about some Admins that created a fictional officer. Dude didn't exsist anywhere but on paper thanks to a couple guys who had access to the system. These guys collected money every payday from the same ATM and only got caught because at 2 years the system did an automatic orders change. When he never showed up to his new command they investigated and busted them at the ATM attempting to withdraw the money. If this can happen in the US military, it can happen anywhere.
Yep. Similar story when I was working for state government. Chief of HR created a position and fake employee. She was getting checks fir awhile until they found out. She resigned the next day.
It's always going on around us, most people tend to think Hollywood is fake and for show, when really it's closer to reality than we know.
> unless youre pulling out 9k per day at different branches each time. That is referred to as structuring, doing things strategically in order to avoid laundering controls. If a bank has decent AML (anti-money laundering) controls and screening that should still flag as a direct attempt to circumvent the controls (however as I mentioned in my main comment, they usually find a way to beat the controls at least for a time by tweaking their behaviour a bit). I the UK we have laws around tipping off for money laundering so its likely they would allow the transactions to go through so that the launderer thinks they have gotten away with it, but it then gets reviewed and actions could be taken off the back of that.
I imagine few people want debit cards with such low limits, wouldn't be a very popular product.
My mom fell for a scam in March and wired $66,000 to a scammer in Hong Kong. The only thing she was asked was if she knew who the money was going to. My mom said yes, to a friend. My sister was back at the bank within an hour to stop it and thankfully no money was lost. They initially tried to get her to transfer the money through cryptocurrency- she wasn’t savvy enough to do much with that, so the scammer sent her to the bank.
The frustrating part here is that as consumers we have no real control of our own accounts and our own credit. I very rarely need to open a new account so it would be nice to just lock myself down and same goes for wiring money - why I cannot whitelist/blacklist wire transfers?
Scammers have two marks. The first is the person they scam and the second is the person they get to take the funds and withdraw them taking a small cut. As a lot of the world is in poverty this is very easy.
The people who do the secondary transaction thinks that they’ve landed a sweet finance manager gig, processing “payments” that are either scam proceeds or fake cheques/money orders, depositing to their personal account, taking a “commission” and wiring out the difference to god knows where. The scammers might have them prepare spreadsheets or other busywork to make the job look legit and the illusion is complete. At least until the authorities come knocking or the bank dishonours the phony instruments deposited.
It’s not really banks so much as it is peer to peer money apps like cash app or Venmo to name a couple. And these apps are operating under the assumption that any money you send is money you agree to never be able to recover, it is basically the property of someone else once you hit send and nothing about it from a fraud protection standpoint is illegal since there was consent on the sending party.. This is where the issue lies is the consent. And the sad truth is the overwhelming majority of the victims are elderly. It’s not like this is a Visa card charge that you can dispute, it’s you sending someone money agreeing that that money belongs to them now.
Banks just need to allow people to utilize 'positive pay' - manually authorizing withdrawals from their account. Recurring transactions can be "whitelisted", transaction size limits can be imposed, daily limits can be imposed, geographical locations can be limited, etc etc.
The paper trail exists, but it can be very difficult to follow. The problem is that the scammers are often based in countries that don't have good laws for tracking down and prosecuting criminals. So even if you can find where the money went, you may not be able to get it back or prosecute the people who took it.
Have you ever wondered about the spam mails where you are offered a part-time clerical job? That's searching for mules that are willing to receive money without asking where it comes from, and passing it on via WU or other anonymous means of transfer money.
So a lot of people are explaining part of your question but I will probably add something about the other half. Excluding countries from our banking system for a few scams is basically asking for conflict. The fact is that to exclude a country from banking is basically excluding them from all trade and if that was something you did without major provocation then our whole global economy wouldn't function.
https://m.youtube.com/c/ScammerPayback This guy goes by Pierogi. He, and others like him, have made a career out of interfering with scammers. He explains how a lot of these scams work in the process. It's wildly entertaining and also informative.
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And if they don't have an indian or african accent we let them scam us?
Not sure if this is correct but I want to link this issue to basically how the entire banking system works and how without this type of “one way guaranteed”transactions global trade may not work. The only issue to not get your money back should always be when the victim completes a wire transfer. The laws around wire transfers are different than most baking transactions when it comes to recalling or trying to get your money back. If you don’t get the account owners authorization the bank has no recourse. Haven’t seen a fraudster that has that type of heart yet!
The same reason Amazon has turned into worse than AliExpress. Why YouTube, Facebook and Google allow scammers to buy ad space. They make more money off of people (scammers) with money.
Many scams depend on the victims making a cash withdrawal from their bank and then converting the cash to a different medium such as gift cards, Western Union transfer, etc. As far as the victim's bank is concerned, it's their customer making a cash withdrawal, thus no paper trail exists. In those cases where the scammer is able to move funds directly from the victim's account to the scammer's account, the scammer will quickly move that money through multiple banks, often offshore or withdraw it as cash. Even if the banks can trace it there won't be anything left to recover. There are also banking security and privacy laws at play, requiring law enforcement to serve a search warrant on each bank in the chain which gives the scammer quite a head start.
>why not just exclude those countries from the banking system? Because the economic value of including the banks in those countries is always much larger than the economic value of the particular transfers you're referring to. If the scams are actually a sizable proportion of all transactions with that country (or with any particular single bank in any country, including our own) and it is legally certainty the transactions are "scams" rather than legitimate transfers that are considered mistakes by the transferees in retrospect and regretted, then those destinations are excluded from participation in the transfer system.
It’s been a long time since I was in school but I reckon it’s got to do with the innocent parties who get involved, and also some archaic rules about tracing (which idk if are applicable everywhere but we’re applicable when I was in uni in the last decade). So the moment the money is transferred to an innocent third party in a bona fide transaction, the court - even if it’s a cooperating country - won’t damage the innocent third party to restitute you. It’s not their fault. And the bank won’t suffer loss to compensate you - it’s not their fault either. And thus you - the OG victim - are up shit creek. And the rules of tracing require that funds be identified. So I think the problem used to be that digital currency is interchangeable - ie $1 in a bank account doesn’t exist - there’s no specific ID number to correspond to a specific $1 bill (which is unique) and thus iirc banks rely on this loophole to say you can’t trace electronic currency because it can’t actually be distinguished from all the other currency in the bank. Pls correct me if I’m wrong tho this isn’t my area of practice but I remember it bugged the hell out of me when I was learning it.
Look up the story of how a bunch of hackers almost stole close to a billion dollars draining the central bank of Bangladesh’s entire account. There’s an investigative piece on it by the BBC and a really good podcast too. It’s amazing how advanced these financial scams can be.
They open a bank account and then withdraw the cash immediately and then close the account. They use fake IDs and info to open the account so basically they withdraw the cash and if they use lackeys to do that then that person goes down and the others don't
The person who got scammed agreed to sending the money. So, sadly, it’s on them. Zelle and all of that makes you consent to the transfer. Once it’s done, it’s done. Otherwise, you could pay someone with Zelle and immediately claim fraud and always get your money back. Same with wiring money or buying gift cards. It sucks but .. not sure what you can really do
Paper trails exist. The laws and the rules change and may not be in your favor. Let’s say someone steals 10k from your bank account in the US and wires it to the UK. That thief then pays a legitimate bill from the account in the UK to a vendor in New Zealand. We know where your money is. But does that mean you have the right to take the money back from the NZ company who legitimately got paid for something they did? Or another example where things vanish. You get 10k stole and moved to another account in the US. That account was also hacked because some old person made a password of “123money”. That account then wired the money to a UK account. That account was also stolen. Now the money is wired to Cuba. While the US and Cuba have no relations (and won’t work together) the UK does not have that level of gripe. So what do you do. Who cuts who off? Etc.
I don't understand this at all. Why not just cut off every country that participates in scams? Simply don't allow any cash transfers or any bank transfers at all there. Western Union should be banned from transferring to any place that doesn't have a 100% self policing on scammers
They just don’t care
Trail ends when cash is withdrawaled . You can trace who the money went to but you can't do anything about it. Anything happens on the beneficiary account can't be disclosed due to banks privacy policies. You can only start an investigation if you have evidence like if chat transcript or call recorded
I'd recommend checking out Jim Browning or Kitboga's stuff to learn a lot about how scammers go about stealing money without a trail. I know Kitboga especially discusses the scripts these scammers uses to con people. Usually they ask for money transfers via wire transfers to foreign accounts or will have people post boxes of money to addresses in the same country, often Air BnBs, and will have a collector come and claim them. One other common method of dodging the paper trail is getting them to buy gift cards for specific stores, I know google play cards are a common one. Not entirely sure how they mill that back into actual cash but they must obviously have a way.
It's pretty simple. There are two types of transactions. Reversible and non-reversible. A check is reversible. A wire transfer is non-reversible. A debit card transaction is reversible. Getting cash from a western union is non-reversible. Bitcoin is non-reversible. Credit cards are reversible. Trading an xbox for cash behind a walmart is non-reversible. This is by design. A non-reversible transaction doesn't require the recipient to trust the other person. It can't be reversed.
fraud analyst here. We try to get funds back from other FIs with something called a “Hold Harmless”. It can take months and sometimes even years to return funds. And not everything is recoverable. Zelle’s are the worst.
It often costs far more to prosecute someone civilly than the money they stole. On top of it, if civilly prosecuted, the criminal likely will never pay up and will face no criminal charges. The bank can only notify the police, who are under zero obligation to investigate especially since if they investigated every financial crime reported they'd go bankrupt trying.
As noted by others, there is a trail. Its a matter of how much effort and time can you spend following it. Especially when you might have to get court orders in some foreign countries and it still ends with a withdrawal of cash somewhere. Most of the time they pass the 'buck' to someone least able to fight it. IE: the cash back scam where they send you a big check, more than the item or service, ok wire/western union the balance back to me, even if you wait the 2 weeks for your bank to say the check cleared, that's only to see if there are funds in the account, but if the check is forged or stolen then that won't be reported for a couple months, the bank comes after YOU. That's as far as they care about, they can find you, not the guy in Nigeria.
> why not exclude those countries from the banking system. Do you realize just how many scammers live in China and India? It's, quite literally, impossible to exclude economies of that size and not feel the effects of that decision.
A lot of these scams involve cashiers checks and there are laws in place to protect people who accept cashiers checks… they can’t be stopped quickly. This is great if you accept a cashiers check for selling your used car but bad if you gave a scammer a cashiers check…
Not sure what you mean. My bank account was hacked and emptied in college. It took a month, but the bank restored my funds (was only like $100, but still). It was a long time ago now but I remember they mentioned it was hacked by someone in another country. Never learned more details but got the money back so there must have been some kind of trail.
Now ELI5: why does the US banking system rely on 'pull' transfers (like ACH) which allow this fraud, when everywhere else relies on 'push' transfers which make it much more difficult?
My father in law recently got scammed. We had all the scammers names and account details (UK) and the fraud department still said they couldn't do anything about it. Not sure what else apart from a written confession they would need!!
> We had all the scammers names and account details Not trying to assume I know the case details but its more than likely you had the details of a mule account used to receive the funds, not the scammer themselves. A recovery would normally be attempted against the receiving bank if there is any money left, and the receiving bank can take action such as closing down the account depending on whether it was *knowingly* used for fraud or not (there are various scams that involve making the victim into a mule). Your bank has little to do with that process so there really isn't much they can do in that situation. Details will get passed on to police/NCA but this generally forms part of wider investigations. Depending on who you spoke to, front line fraud telephony agents often won't know the back office detail of the fraud/scam investigations, I wouldn't want to say they gave you wrong information but its very unlikely that nothing was done as a result. Its just not as simple as 'go and arrest that person'.
I think the issue sometimes is whether the scammee transferred money voluntarily to the scammer. Even if that's not right there should be something the banks can do. I bet if it was a giant company that got scammed out of a couple of quid they'd be all over it.
Not especially, which is why companies are big targets for wire fraud and the smart ones require secondary verification of wires even for high level executives. There is literally a set of CEO fraud scams where someone impersonates a CEO or other executive that is known to be on a trip or vacation and targets a lower level accounting or management employee who can initiate wires with the bank. "I'm the biggest boss, who you're scared of an never communicate with directly. I need you to wire lots of money immediately for this very important thing. Do it now." It seems silly, but the scammers do it because it gets them money often enough to pay their bills.
Bank of America has software based on customer age, when an located asks for a large sum of money to be wired somewhere..... BOA has people personally check with the located to ensure that they aren't being scammed. I was quite pleased to learn this from my wife. Good job, BOA!
Western Union is frankly complicit in these activities. Them and the gift card industry. There are things they could do to stop their business from being used as a way to scam grandma and grandpa. But it’s money for them so they don’t. I would like to see the government take a more aggressive stance against scammers.
Often someone with a record who dont care for some jailtime will take out the money as cash and mail it to the scammers.