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Money Transfer Scams: What Are They and How Can You Protect Yourself?

Last updated 03/30/2024 by

Andrew Latham

Edited by

Summary:
Over 5.4 million fraud reports are filed in the U.S. every year, with imposter scams leading to losses of nearly $2.7 billion out of a total of over $10 billion. The rise in money transfer scams, predominantly via wire transfers and credit cards, underscores the urgent need for vigilance. Methods of contact varied, with phone calls being the most common. While all age groups were targeted, those 60-69 suffered the most financially, yet younger demographics reported higher incidences of fraud. The data highlights the critical importance of education and caution in financial transactions to thwart scam artists.
How common are money transfer scams in the U.S.?
In 2023, there were over 5.4 million reports filed with the Consumer Sentinel Network, with fraud reports constituting 2.6 million (48%) of these. Imposter scams were the most prevalent type of fraud, leading to nearly $2.7 billion in losses. Overall, Americans reported losing over $10 billion to fraud in 2023, marking a significant increase from the previous year. Investment-related scams were the most damaging, accounting for over $4 billion in losses.
With money lost to fraud on the rise in the U.S., how can you protect yourself? Here’s the breakdown of what money transfer scams are and how you can protect yourself.

Top 20 types of fraud

How exactly are people being scammed? Here are the top 20 types of fraud:
RankCategoryIncidences ReportedPercentage of Total ScamsTotal $ LostMedian $ Lost
1Imposter Scams853,93521%$2.668B$800
2Online Shopping and Negative Reviews368,37953%$392M$125
3Prizes, Sweepstakes and Lotteries157,52013%$338M$878
4Investment Related107,69975%$4.642B$7768
5Business and Job Opportunities107,13432%$491M$2137
6Internet Services98,7177%$36M$250
7Telephone and Mobile Services94,26111%$19M$206
8Health Care71,5187%$17M$300
9Travel, Vacations, and Timeshare Plans55,06322%$122M$1187
10Foreign Money Offers and Fake Check Scams32,16434%$138M$1900
11Credit Cards and Loss Protection101,4271.88%$101M$1,100
12Bank and Lenders230,2244.27%$230M$500
13Auto Related178,1003.30%$178M$1,000
14Debt Collection124,4502.31%$124M$500
15Home Repair, Improvement, and Products82,7111.53%$83M$1,200
16Privacy, Data Security, and Cyber Threats77,7371.44%$78M$600
17Travel, Vacations, and Timeshare Plans55,0631.02%$55M$1,200
18Television and Electronic Media39,7150.74%$40M$1,000
19Foreign Money Offers and Fake Check Scams32,1640.60%$32M$1,500
20Advance Payments for Credit Services29,8780.55%$30M$700
Note that scam reports can be classified under multiple categories.

1. Imposter Scams

Scammers impersonate trusted figures like government officials or family members to steal money or personal information.
Example: A scammer calls, claiming to be from the IRS, demanding immediate payment of back taxes.
Avoid: Never give out personal information or money over the phone without verifying the caller’s identity through official channels.

2. Online Shopping and Negative Reviews

Deceptive practices in online shopping, such as selling counterfeit or non-existent products, and manipulating product reviews.
Example: A website sells brand-name products at heavily discounted prices, but the items never arrive, or are fake.
Avoid: Shop on reputable sites, check reviews carefully, and be skeptical of deals that seem too good to be true.

3. Prizes, Sweepstakes, and Lotteries

Victims are lured with promises of cash prizes or winnings, often asked to pay fees or provide personal info to claim these non-existent rewards.
Example: You receive an email claiming you’ve won a lottery, but must pay a fee to collect your winnings.
Avoid: Do not pay money upfront to claim a prize, and verify any such offers through independent sources.

4. Investment Related

Scams promising high returns on investments, including Ponzi schemes, fraudulent investment opportunities, and other deceptive financial advice.
Example: An investment firm promises guaranteed high returns with no risk, but it turns out to be a Ponzi scheme.
Avoid: Be skeptical of investments promising guaranteed returns, research thoroughly, and consult with a financial advisor.

5. Business and Job Opportunities

Frauds related to fake business ventures, work-from-home schemes, and bogus job offers designed to extract personal info or upfront payments.
Example: A job posting offers high pay for remote work with no experience, but requires payment for training or equipment.
Avoid: Research companies before applying, never pay for the promise of a job, and be wary of offers that seem too good to be true.

6. Internet Services

Frauds involving internet services, including phishing, malware distribution, or exploitation on social networks and online platforms.
Example: An email claiming to be from your bank directs you to a fraudulent website to enter your account details.
Avoid: Use strong, unique passwords, never click on suspicious links, and verify the authenticity of requests for personal information.

7. Telephone and Mobile Services

Scams using phone services, such as unauthorized charges, fake service offers, and other deceptive practices to steal money or personal info.
Example: You receive a call from someone claiming to be your mobile carrier, offering a special upgrade in exchange for immediate payment.
Avoid: Verify any offers with your service provider using official contact numbers, not those provided by the caller.

8. Health Care

Frauds offering fake health products, insurance, or services, leading to financial loss or misuse of personal health information.
Example: An online pharmacy offers prescription drugs without a prescription at low prices, but the drugs are counterfeit.
Avoid: Purchase health products and services from licensed providers, and verify the legitimacy of online pharmacies before buying.

9. Travel, Vacations, and Timeshare Plans

Scams offering fake travel packages, timeshare sales, or luxurious trips at unrealistic prices, often failing to deliver as promised.
Example: A travel agency offers an all-inclusive vacation at a steep discount, but after payment, the trip is either non-existent or substandard.
Avoid: Book through reputable travel agencies, read contracts carefully, and be skeptical of vacation offers that require large upfront payments.

10. Foreign Money Offers and Fake Check Scams

Schemes promising large financial gains in exchange for help with fund transfers, or issuing fake checks and asking victims to send money back.
Example: You receive a check with instructions to deposit it and wire a portion of the money to a third party.
Avoid: Never deposit checks from unknown sources, especially if asked to send money back or to someone else.

11. Credit Cards and Loss Protection

Scams involving unauthorized credit card charges, phishing for card information, or selling unnecessary loss protection services.
Example: A scammer contacts you claiming to be from your bank, offering credit card loss protection insurance you don’t need.
Avoid: Never give out credit card information over the phone unless you initiated the call to a number you know is genuine.

12. Bank and Lenders

Fraudulent banking activities, including fake loan offers and deceptive lending practices to extract financial information or money.
Example: Receiving an unsolicited loan approval email that asks for an upfront payment to “secure” the loan.
Avoid: Be skeptical of unsolicited loan offers and never pay upfront fees for loans or financial services.

13. Auto Related

Scams related to the automotive sector, including selling non-existent vehicles, fraudulent loans, and deceptive repair services.
Example: Online classified ads for cars at prices well below market value, which turn out to be non-existent.
Avoid: Always verify vehicle history and inspect the car in person before purchasing. Avoid paying for a vehicle you haven’t seen.

14. Debt Collection

Impersonation of legitimate debt collectors to extract payments for fictitious debts, often employing intimidation tactics.
Example: Callers alleging to be debt collectors for debts you don’t recognize, demanding immediate payment.
Avoid: Request written validation of any debt before making payments and verify the collector’s legitimacy.

15. Home Repair, Improvement, and Products

Scams offering home improvement services that are not delivered, overcharging, or selling substandard home-related products.
Example: A contractor asking for full payment upfront for home repairs and then disappearing without completing any work.
Avoid: Avoid paying the full amount upfront and verify the contractor’s references and credentials.

16. Privacy, Data Security, and Cyber Threats

Scams targeting personal data and privacy, involving hacking, phishing, malware, and ransomware for data theft or extortion.
Example: Receiving an email that looks like it’s from a reputable company, asking to verify your account details.
Avoid: Do not click on links or download attachments from unknown sources. Use strong, unique passwords for different accounts.

17. Utilities and Energy

Frauds involving utility services, like fake bills or charges for services never rendered, often targeting vulnerable individuals or seniors.
Example: Callers claiming to be from a utility company, threatening to cut off service unless immediate payment is made.
Avoid: Verify any such claims by contacting your utility provider directly using official communication methods.

18. Television and Electronic Media

Scams related to TV and electronic media services, including misleading subscriptions, and fraudulent advertising of electronic products.
Example: Ads offering premium channels at low prices that are actually unauthorized and illegal services.
Avoid: Purchase subscriptions and electronics from reputable sources and verify the authenticity of offers.

19. Real Estate and Rental

Real estate scams involving fake rental listings, fraudulent property sales, or deceptive timeshare offers that mislead buyers and renters.
Example: Listings for rental properties at rates well below market value, where the scammer requests a deposit before viewing.
Avoid: Never pay a deposit or sign a contract without first verifying the property and meeting the landlord or agent.

20. Advance Payments for Credit Services

Scams requiring advance payments for purported loans, credit cards, or credit repair services that never materialize, exploiting victims’ financial needs.
Example: Companies offering to repair your credit score or provide loans after receiving an advance payment.
Avoid: Be wary of services that ask for money upfront to repair credit or secure loans. Research the company’s reputation thoroughly.

Avoid advance-fee loan scams

Advance-fee loan scams trick victims into paying money upfront for a loan or credit that never materializes. These scams can be convincing, with fraudsters posing as legitimate lenders and promising easy approval and quick cash. For instance, there have been scammers who have posed as SuperMoney loan officers (even though we do not offer direct loans and do not have loan officers). SuperMoney will never call or contact you offering you a prequalified loan, request your checking information, or request an advance fee to process a loan.
  • Recognize the Signs: Be skeptical of any offer that requires an upfront fee to secure a loan, especially if asked to pay via wire transfer, gift card, or in cash.
  • Research Thoroughly: Verify the lender’s credentials, check for reviews, and confirm their legitimacy with financial authorities before providing any personal information or money.
  • Legitimate Lenders: Genuine lenders do not ask for payment before processing loans. Fees are typically deducted from the loan amount, not charged upfront.
  • Report Suspicious Activity: If you encounter a potential loan advance fee scam, report it to the authorities, such as the Federal Trade Commission (FTC) or your local consumer protection agency.
While there are many more fraud report categories, these 20 are the most common.

Top payment methods for money transfer scams

You may be wondering, how do scammers get your money? How does it get from your bank or wallet to the scammer’s pocketbook? You can find the full breakdown below:
Payment MethodsNumber of Fraud ReportsTotal $ Lost
Credit Cards114,348$246M
Debit Card83,370$220M
Payment App or Service65,305$210M
Bank Transfer or Payment51,221$1.86B
Cryptocurrency47,537$1.41B
Wire Transfer42,729$344M
Gift Card or Reload Card41,632$217M
Cash13,656$271M
Check8,603$209M
Money Order3,087$45M
The most common payment method for fraud is the wire transfer, accounting for a reported total loss amount of $344 million. The next most popular method was credit card payments, which account for $131 million lost.

How do scam artists contact people?

How do scam artists get ahold of you? Here are the different contact methods, along with how frequently each is used:
  • Phone – 69%
  • Website – 12%
  • Email – 10%
  • Consumer Initiated Contact – 5%
  • Mail – 3%
  • Other – 2%
Below, see the number of reports and how much money was lost for each contact method:
Contact Method# of ReportsTotal $ LostMedian $ Lost
Email358,428$430M$575
Phone call297,765$850M$1,480
Text230,407$372M$1,000
Website or Apps193,659$894M$223
Social Media181,396$1.486B$341
Other167,476$1.246B$625
Online Ad or Pop-up43,741$224M$168
Mail42,235$81M$799
Accordingly, you should be especially cautious when receiving phone calls that seem fishy. But be wary of other contact methods, too. Scammers may pursue you via websites, email, and snail mail.

Who is filing fraud reports and how much are they losing?

No age group is immune to scams, with varying degrees of reported losses and incidents. Here’s the latest data on which demographics are most affected:
AgeShare of Reported FraudShare of $ LossesPercentage Reporting $ Loss
19 and under3%$56M50%
20-2914%$450M44%
30-3918%$840M40%
40-4916%$884M35%
50-5915%$863M29%
60-6918%$980M25%
70-7913%$700M22%
80+4%$244M19%
According to the 2023 data, individuals in the 60-69 age bracket reported the highest monetary losses to fraud, while those 20-29 were most likely to report fraud incidents. This trend indicates that while younger people are reporting fraud more frequently, older individuals are incurring higher financial losses.

What to do if you fall victim to a money transfer scam

If you fall victim to a money transfer scam, the first thing you should do is call the police and your bank in cases of money transfer fraud. Tell them what happened and how much money you lost.
Next, file a complaint with the FTC. Once you realize you have been scammed, do not communicate with the scammer any further.

How to protect yourself from money transfer scams

Lastly, how can you prevent yourself from being scammed? Well, you are already on the right track by educating yourself about how scammers operate. If you understand the tactics that scammers use, you will be better able to identify them if they contact you.
Additionally, here are a few tips to keep in mind.
  • Don’t send money to a stranger under any conditions.
  • Listen to your gut. If something seems off, it probably is.
  • Don’t take quick action when sending money. Perform internet research and consult with friends or family members first. If you are in contact with someone who pushes you to send them money fast for an urgent deadline, be wary.
  • The government, service providers, and financial institutions don’t send, request, or confirm personal information or passwords via email.
  • Choose a reputable money transfer provider with the latest security measures in place.
Falling victim to a money transfer scam is never a good feeling. But by taking these steps, you can reduce your chances and keep your savings safe.
Review and compare money transfer services below to find one you can trust.

Key takeaways

  • Fraud reports in the U.S. exceeded 5.4 million in 2023, with a significant portion being imposter scams, resulting in nearly $2.7 billion in losses.
  • Total losses from fraud in 2023 surged to over $10 billion, indicating a rising trend in scam activities.
  • Investment-related scams were particularly detrimental, contributing to more than $4 billion of the total losses.
  • Wire transfers and credit cards were the most common payment methods used in frauds, highlighting major avenues for financial scams.
  • Phone calls were the primary method scammers used to contact victims, accounting for a large number of the fraud reports.
  • The age group 60-69 was the most financially impacted by fraud, although the younger population reported a higher frequency of scams.
  • Increased awareness and preventive measures are crucial for individuals to protect themselves from falling victim to these scams.

Andrew Latham

Andrew is the Content Director for SuperMoney, a Certified Financial Planner®, and a Certified Personal Finance Counselor. He loves to geek out on financial data and translate it into actionable insights everyone can understand. His work is often cited by major publications and institutions, such as Forbes, U.S. News, Fox Business, SFGate, Realtor, Deloitte, and Business Insider.

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