The Expert Podcast

Many clients that contact us have been victims of some type of online fraud or scam and have wired money to a party, only to later realize that the wire transfer was fraudulent. Sometimes it's an escrow fraud where people send money for a real estate transaction to their title company and find out that the email they received from their title company was fraudulent. They actually wired their closing funds, purchase money, or down payment to a scammer or fraudster. Other times, it’s an investment that turns out to be a scam.

In the past, this was always considered a lost cause, with little hope of getting any money back. However, a lot of people don’t realize that the FBI has a procedure that can be used to recover funds that have already been sent out. Sometimes, banks don't even know about this process. It’s called the Financial Fraud Kill Chain, and it’s a procedure where the FBI uses a specific banking protocol to reverse funds that have been sent to a fraudster. Here are some details about it: it's performed by financial institutions for victim fund recovery.

Normal bank procedures should be conducted, and the Financial Fraud Kill Chain can only be implemented if the fraudulent wire transfer meets certain criteria. It has to be $50,000 or above. If you've only lost $49,900, this procedure can't be used. But if you’ve lost $50,000 or more, you’re eligible. Additionally, if the wire transfer was international, meaning it was sent overseas (which many scammers do), you must put in a SWIFT recall notice. Also, the wire transfer must have occurred within the last 72 hours. However, in some cases, this last criteria can be handled differently. So if it’s been longer than 72 hours, don’t give up hope just yet.

To initiate the Financial Fraud Kill Chain, you need to provide the following information to the FBI: the name of the victim, location, the original bank name, account numbers, and where the money went to. The SWIFT code must be included, along with the amount and transaction details. If there is any additional information (for example, forwarding information), this should also be included. Many of these wire transfers have an FFC, which is where the money is forwarded to afterwards.

This process is part of the FinCEN rapid response program, which has recovered more than a billion dollars for U.S. victims as of last year, with even more funds recovered since then. The success rate of the Financial Fraud Kill Chain (FFKC) is 74%. The FBI has responded to over 1,700 incidents as of 2021, but that number has since surpassed 2,000 incidents. This program boasts a 74% success rate in recovering funds.

What types of fraud does this uncover? Criminals use the banking system to deceive a party into sending funds via wire transfer to the wrong location. They send false wire instructions from a criminal attempting to redirect legitimate payments to a bank account controlled by fraudsters. This happens many times in real estate transactions. If you have purchased a property and have a closing scheduled with a title company, the title company typically sends you wire transfer information, including account routing numbers, for you to wire your down payment. Criminals will insert themselves into your email chain by spoofing or hacking the email and sending fraudulent wire instructions. These instructions will look legitimate, complete with logos and contact information from the title company. Once you wire the money, it’s gone.

The FFKC (Financial Fraud Kill Chain) is a way to attempt to recover money from a fraudulent wire transfer. To avoid this, one preventive measure is to send a small test payment before wiring your entire down payment. We've talked about this before: send $20, $200, or even $1,000 to the wire contact. Then, contact the title company directly by phone or in person to confirm whether they received it. If they did, you know that account number is valid, and you can proceed with the rest of the payment.

If you have fallen victim to fraud, be aware of the FFKC (Financial Fraud Kill Chain) as a way to recover your money. You can use the information in the links below or arrange a consultation with our company through TeleClient. To recap, the criteria are that the loss must exceed $50,000 and the fraudster must be international (not in the U.S.).