Con-artists exploit confusion around international 'wire transfers'

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There is something strangely fascinating about true crime drama, and if there’s one thing that has captured the cultural zeitgeist it is true life tales of elaborate scams.

Two of Netflix’s top-rated shows over the past few months were Inventing Anna and the Tinder Swindler, both of which follow the oddly gripping stories of real-life fraudsters who managed to swindle businesses and individuals out of hundreds of thousands of dollars.

Inventing Anna follows the story of ‘fake German heiress’ Anna Delvey (real name Anna Sorokin, born in Russia), who tricks New York society into believing she has a multi-million-pound trust fund in Germany. 

Real-life drama: The Tinder Swindler delves into the life and exploits of serial conman Shimon Hayut - better known as Simon Leviev

Real-life drama: The Tinder Swindler delves into the life and exploits of serial conman Shimon Hayut – better known as Simon Leviev

She uses her ‘fake’ profile, promise of wealth ‘to come’ and plans to launch The Anna Delvey Foundation – an exclusive ‘art club’, to con friends, influencers, fashionistas, tech entrepreneurs – as well as banks, credit card companies, hotels and other businesses out of hundreds of thousands of dollars.

The Tinder Swindler delves into the life and exploits of serial conman Shimon Hayut – better known as Simon Leviev – who used the dating app Tinder to connect with women and manipulate them into supporting his lavish lifestyle. 

He would charm women with gifts, take them out to dinner and on private jets using money from other women he’d already conned, and later claiming he needed money to escape his ‘enemies’.

And while the methods of these two scam artists differed, there were also a number of similarities in their crimes. The first being that both managed to scam individuals, businesses and institutions, the second, was that they wouldn’t have been able to get away with their crimes had they not been able to exploit the opaqueness of ‘wire transfers’ within the cross-border payment system.

In fact, for Anna Delvey in particular, the well-known issues associated with wire transfers – most notably the length of time between the money being sent and received – formed the basis for her deception, as she was able to repeatedly blame delays in payments to friends and businesses on slow wire transfers. 

Billy McFarland – the ‘contrepreneur’ behind the fake Fyre festival – which, interestingly featured in Investing Anna – also blamed wire transfers for why vendors had not received their money.

Stephen Grainger is Executive Vice President at Mastercard

Stephen Grainger is Executive Vice President at Mastercard

And the fact of the matter is, even in our increasingly digital world, many cross-border payments do still take far too long – several days in many cases – compared to domestic payments. Not only that, but there is also a real lack of clarity around the sending, tracking and receipt of funds, and fees, making it difficult to know when the funds will arrive, and the amount.

According to our new Borderless Payments report – set to be published next month – the main issues with international transfers were the time it takes (27 per cent), not being able to track the payment (45 per cent of businesses and 29 per cent of consumers) and not getting any confirmation that the funds had been received (55 per cent). 

The research with 3,000 small businesses and 8,000 consumers globally found lack of transparency on how much the transfer will cost – and therefore the amount that will actually arrive with the recipient – was also a top concern (27 per cent of businesses and 31 per cent of consumers).

These issues therefore provide a perfect loophole for fraudsters to exploit, giving them the time and space they need to con their victims before they even realise what has happened. 

As we saw with Anna’s friend Rachel in Inventing Anna, people waiting for money to arrive can be easily appeased simply by being told the money is ‘on its way’.

And there is a clear link between these concerns, and the type of cross-border payment solutions people opt for. 

When asked what the most important factor is when choosing their payment method, security came up top (41 per cent), followed by speed (39 per cent) confirmation of delivery (33 per cent) while for 28 per cent, being able to track the payment, is key and 26 per cent want upfront awareness of how much the transfer will cost and how much will be received. 

For businesses respondents, it was a very similar picture, with 45 per cent putting security as the main reason 36 per cent being able to receive fund within 24 hours and 36% prioritising confirmation that funds had arrived.

Furthermore, 70 per cent of people and 67 per cent of businesses said they’d use cross-border payments more if they were quicker.

If the Borderless Payments report – and these dramatised (but real) examples of how international payment systems can be so easily exploited – tell us anything, it is that cross-border payments need to catch up with domestic payments, both in terms of transparency and certainty – so that people and businesses have more trust and faith in them, and fraudsters are unable to abuse them.

Of those who have concerns, two in five consumers (42 per cent) and more than a quarter (27 per cent) of businesses (27 per cent) said that they fear becoming victims of fraud due to the opacity of the international payments network.

At Mastercard, we believe that cross-border payment systems must become faster, cheaper and more secure, not only to give people and businesses the peace of mind that their money will arrive securely and on time, but also to ensure the Anna Delveys of this world will no longer be able to exploit the perceptions of the system for their own criminal gain.

Stephen Grainger is Executive Vice President at Mastercard. 

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