Plausible Deniability and Who Absorbs a Wire Fraud Loss?

When working on recovering fraudulent wire transfers, there are always common themes across all the crimes. The two I’d like to highlight here are:

1. The company that hits send on the wire will likely be the one absorbing the loss. The money will not be recovered, and the loss will hit your P&L directly (and not be covered by insurance).
2. Your teammates in IT, accounting, sales along with your vendors will blame each other as the liable party.

In the aftermath, all teams seek cover, each offering a plausible explanation why they are not liable:

1. We were hacked! This is an IT problem!
2. Accounting handles the money and they called a bad number! It’s their fault!
3. The “deal” lead should have made the call! This is an accountability problem with the front office!
4. Our counter-party or vendor had a compromised email. We were processing their instructions and they should absorb the loss.

As the days pass and the reality of the loss sets in, everyone feels justified in their position, but the large financial loss remains. What we have repeatedly found is leadership must absorb the loss because no formal process, no chain of accountability ever existed.

The plausible deniability grows! The bad guys were really good, mistakes happen and we had a bad day that led to thousands, even millions out the door.

The question companies, leaders, and teams should be asking themselves is, “If you were personally liable for stolen wires, would you start doing anything differently today? What tools and resources would you be demanding?”

If you want the answer, please contact us.