4 ms·

Naive question, but why can't banks undo a fraudulent transaction? Is there no such framework in place?

yardie 5y ago
EFTs are reversible but have much lower limits. To move this much money they probably used a bank wire. This can be reversible if you catch it in time. But wires happen so fast the thieves will surely transfer the money elsewhere before the originator even finds out.
- _trampeltier 5y ago
  Are the banks not liable, when they don't know there customer?
  - tonmoy 5y ago
    The thief’s can wire it to an account in an offshore country where US authorities would have no power.
    - thatfunkymunki 5y ago
      I still don't quite get this. I always imagined a bank wire as a data transfer, and that an actual settlement of hard currency happens sometime thereafter. How is it irreversible, in this regard?
  - duxup 5y ago
    Do the banks in this case provide some assurance / can they be sure who is on the other end of the transfer?
  - formerkrogemp 5y ago
    If it's a transfer using your authentication details they might put the transaction on hold or call you, but, no, they generally aren't liable with the processes they have in place unless there's significant negligence. The college might have been the one authorizing the transfer here to the wrong party. Banks can't or don't typically verify all of your vendors and clients and transactions. They provide the money pipes.
tyingq 5y ago
The scammers typically recruit fall guys to open accounts to receive the funds by offering them some small portion of the take. Along with a story about it being a favor , like "I'm from outside the country and don't have a bank account to receive my recent inheritance, etc". With perhaps some intermediate transfers to other fall guys if it's a large amount. The funds are withdrawn in sub $10k chunks by the fall guys in cash as they arrive and the larger portion handed over to the scammer.
- angry_octet 5y ago
  These people are usually called mules or money mules, inheriting the name from drugs smuggled on an individual courier. Usually they are tricked into immediately depositing the cash into an array of destination accounts; this part is called smurfing. Sometimes they are told to buy physical goods and have them shipped, usually to a third country. Cuckoo smurfing is a clever variant where the mules think they are receiving a legitimate payment, e.g. an inheritance, and they have to pay some beneficiaries, or they think they are shipping agents, doing drop shipping, and they have to pay their suppliers. People are gullible.
- formerkrogemp 5y ago
  It happens across multiple chains of "fall guys" accounts making reversing very difficult.
dboreham 5y ago
They can undo. But if there's some Marty Byrde on the other side, there are ways of making the txn durable, not subject to undo.

EFTs are reversible but have much lower limits. To move this much money they probably used a bank wire. This can be reversible if you catch it in time. But wires happen so fast the thieves will surely transfer the money elsewhere before the originator even finds out.

_trampeltier 5y ago
Are the banks not liable, when they don't know there customer?
- tonmoy 5y ago
  The thief’s can wire it to an account in an offshore country where US authorities would have no power.
  - thatfunkymunki 5y ago
    I still don't quite get this. I always imagined a bank wire as a data transfer, and that an actual settlement of hard currency happens sometime thereafter. How is it irreversible, in this regard?
- duxup 5y ago
  Do the banks in this case provide some assurance / can they be sure who is on the other end of the transfer?
- formerkrogemp 5y ago
  If it's a transfer using your authentication details they might put the transaction on hold or call you, but, no, they generally aren't liable with the processes they have in place unless there's significant negligence. The college might have been the one authorizing the transfer here to the wrong party. Banks can't or don't typically verify all of your vendors and clients and transactions. They provide the money pipes.

tyingq 5y ago

The scammers typically recruit fall guys to open accounts to receive the funds by offering them some small portion of the take. Along with a story about it being a favor , like "I'm from outside the country and don't have a bank account to receive my recent inheritance, etc". With perhaps some intermediate transfers to other fall guys if it's a large amount. The funds are withdrawn in sub $10k chunks by the fall guys in cash as they arrive and the larger portion handed over to the scammer.

angry_octet 5y ago
These people are usually called mules or money mules, inheriting the name from drugs smuggled on an individual courier. Usually they are tricked into immediately depositing the cash into an array of destination accounts; this part is called smurfing. Sometimes they are told to buy physical goods and have them shipped, usually to a third country. Cuckoo smurfing is a clever variant where the mules think they are receiving a legitimate payment, e.g. an inheritance, and they have to pay some beneficiaries, or they think they are shipping agents, doing drop shipping, and they have to pay their suppliers. People are gullible.
formerkrogemp 5y ago
It happens across multiple chains of "fall guys" accounts making reversing very difficult.

dboreham 5y ago

They can undo. But if there's some Marty Byrde on the other side, there are ways of making the txn durable, not subject to undo.