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  • Money Wiring: Is It Safe or a Scam?

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In many of our advisories towards consumers, we discuss how scams are capable of preying on people and exposing vulnerabilities, fears, and our drive towards green. However, one aspect of all these scams tend to be overlooked – how scammers are actually getting your money. Probably the oldest service that renders it easy to take someone’s money remains the most anonymous and least protected method around – money wiring. Is a request to wire money indicative of a scam? And if so, is money wiring a safe service to use?

Money wiring comes in two varieties: account wiring and cash wiring. Account wiring is similar to direct deposits or writing cheques: money is transferred directly between two banks. This is a useful way for smaller businesses to arrange single payments when they don’t have the infrastructure to do it themselves. And as far as methods of transferring money, it’s a relatively safe way to pass funds from one place to another.

The other type of money wiring is cash wiring, also known as retail money wiring. This is the type of service that scammers hope you confuse with account wiring. Cash wiring can be done with pure cash, and it is, for the most part, untraceable in where it goes and whom it goes to.

Cash wiring is intended for, and only for, wiring money between people who know each other very well. However, it’s been adopted for use in a variety of scams, including scams in which you’re overpaid with a false cheque and asked to wire the difference back. Or if you’re told you’ve won a prize or vacation, and are asked to wire an advance fee to claim.

While money transfer services are required to keep records about anyone who uses their services and ask for ID when processing transfers, many services have lapsed and don’t even do basic security checks. As a result, money wiring services have become a haven for money laundering and advance fee scams all around Canada, and account for a large chunk of where lost money goes from those victimized by scams.

And due to the nature of money wiring services, there’s little to nothing you can do if you have been a victim of a money wiring scam. Money transfer services are often unable to or unwilling to take responsibility for a failure to check documentation.

And if the error is on your end for having been brought into the scam: you’ll be on the hook. This irresponsibility has gone as high as major banks refusing to admit responsibility for failing security checks on their transfer systems.

There’s a time and place for wiring money. If it’s between you and a registered business by an account wiring, it’s about as safe as other bank transfers. But if it’s a cash transfer, stop yourself. Ontario Energy Group Consumer Watch advises that you should only ever use a cash transfer to someone you personally know and greatly trust.

A cash transfer is functionally identical to giving someone a wad of cash. If it’s not safe to hand them the cash in person, it’s even less safe to hand it off through a proxy service. Keep your cash in your hands and do a transfer instead.

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