A wire transfer, either through banks or through electronic money transfer services, is perhaps one of the fastest and most convenient ways of sending money over long distances. But are wire transfers safe? That depends on how you look at it. If you are referring to the method of delivery, then it’s quite safe.
The Wire Transfer Infrastructure
Casting aside all the complex technical details, all you need to know is that the technology used to transfer money electronically is utterly secure. This is the reason why large companies, banks, and even governments use wire transfers without hesitation. Trillions of dollars are sent through the wire every day. The technology used by banks and cash offices is checked vigorously. The United States Federal Reserve Banks, for example, use a funds transfer system called Fedwire, and that system is trusted enough that about 3 trillion dollars are transferred each day.
Other secure systems include the Clearing House Interbank Payments System (CHIPS) and the Society for Worldwide Interbank Financial Telecommunications (SWIFT).
The Danger of Wire Transfer Fraud
The security problem of wire transfers isn’t in the system at all. It all boils down to whether or not you should be sending the money in the first place. Almost always, the risk increases considerably when you use wire transfers to send money to someone you don’t know. Thousands of people have been victimized by various types of wire transfer fraud.
• One popular scam is the fake charity. When the news programs feature terrible accounts of disasters in faraway places, you may be contacted by a supposed charity organization by phone or online asking for donations. Even if you are inclined to be generous, giving money through wire transfers to people who are basically strangers is not a good idea. Instead, you can help by giving your money to a reputable organization that can then use the money you sent much more responsibly.
• You may also be contacted by someone claiming to be a relative who’s in a jam. You may be contacted by a lawyer, a hospital representative, or a police officer informing you that a relative needs money for some sort of emergency. Before you send any money through wire transfer, you first need to talk to that relative directly, and you also need to verify their identity.
• Online purchases are another common way for criminals to commit fraud. Perhaps you found something you want to buy online, and the seller insists that you first need to send the money before the goods can be sent to you. If you comply with this arrangement, there’s a very good chance you won’t ever see your money (and your supposed purchase) ever again.
Send money only to people and companies you know. Send money to people you’ve never met (or to people who may or may not be pretending to be someone you know), you could definitely be scammed. You have to practice caution and use common sense when sending wire transfers in order to be absolutely safe.