Wire transfers are one of the most efficient ways to transfer money overseas, but is it safe to wire money? The simple answer is yes. Usually.
The biggest risk to your money could be you
According to the FDIC, “Using a bank or a money transfer company to “wire” funds electronically is an easy and convenient way to send cash to someone. And when consumers wire money to people they know, the transaction typically takes place without a problem. But wiring money to strangers […] is risky because often they could be scam artists.”1
The risks associated with wiring money are, in part, a result of the efficiency of the method for sending funds. Wire transfers can often be completed within one business day by providers like OFX. But once the funds are received by the overseas party, it’s very difficult to retrieve them if you discover a problem.
How can you stay safe when wiring money?
You can increase the safety of your money wire by following some simple guidelines:
Avoid wiring money to someone you’ve never met in person.
If you need to pay people you’ve never met like overseas suppliers, verify their business credentials through phone calls, online reviews and other means. This is to ensure you are dealing with the company itself and not an imposter pretending to be your supplier.
Be especially cautious when wiring money to someone who first contacted you via email or dating service.
Choose a money transfer provider with a dedicated fraud prevention team like OFX.
If you are wiring money for an investment, check with the local securities commission to see if the investment company is regulated. You can check who regulates them by going to the IOSCO (International Organization of Securities Commissions) website. Then, you can contact the appropriate overseas regulator or search its website to ensure that a company of that name is registered or licensed.
Be careful when donating to independent charities who may lack the oversight of larger organisations and who may not be what they claim. Do some research before you give. Check the organization’s identity and tax status before you donate.
Is it safe to wire money with your bank?
As discussed above, wiring money with your bank will not necessarily make your transfer safer and using your bank could cost you a lot. Banks often take a margin of 5% over the daily exchange rate when they send your money overseas. That means on a wire transfer of $10,000 you could be paying up to $500 in addition to hefty ‘international transaction’ fees. At OFX, we think that’s too much. When you register with us, you might save hundreds on a similar transfer of $10,000.
So is it safe to wire money? Yes, as long as you take some simple precautions to protect yourself from unknown recipients and high bank fees.
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