How Safe Are Money E-Transfers?


Electronic funds transfer (EFT) is a quick and easy method of sending and receiving money. They are commonly used without incident, but like anything involving money, they might be a target for hackers. Is it safe to send money over email? After all, there have been recorded examples of consumers losing thousands of dollars due to e-transfer fraud.

E-Transfers Definition

E-transfers are defined under the United States Electronic Money Transfer Act of 1978 as,

“A cash transfer initiated by an electronic terminal, telephone, computer (including online banking), or magnetic tape to order, instruct, or authorize a financial institution to debit or credit a consumer’s account.”

Electronic financial transfers (sometimes known as ‘e-transfers’) are recognized by several names worldwide.

As an example:

  • In the United States, they are known as “electronic checks” or “e-checks.”
  • The words “bank transfer” and “bank payment” are used in the United Kingdom.
  • The phrase “giro transfer” is extensively used in numerous European nations.

How Do E-Transfers Work?

Wiring money is the current version of online money transfers. You can instantaneously send money to someone by moving money (or the data that represents money) from you to them.

A typical transaction contains contact information for the sending and receiving parties, such as a phone number or email address linked to a bank account. Secure, web-based businesses typically offer online money transfers for a modest price.

The procedure is simple and frequently goes as follows:

  1. The sender launches an online banking session and enters the recipient’s name, the amount to be sent, and a security question and answer. The money is immediately deducted, generally for a charge.
  2. For security reasons, the sender delivers the security response to the recipient separately, generally by another means.
  3. The receiver is then sent an email or text message with instructions on collecting the money and answering the question.
  4. The receiver must correctly answer the security question. If the recipient does not successfully answer the question a certain number of times, the cash might be returned to the sender.
  5. An e-transfer must be accepted within a particular time frame to be taken. The bank and the individual’s settings determine the transfer period.

Are E-Transfers Safe?

E-transfer fraud happens when a third party intercepts a transfer by breaking into a person’s email account and accurately guessing or discovering the answer to the security question. They then deposit the money, but it never reaches the designated receiver.

E-transfer scams typically involve people asking for money (either for themselves or to purchase a product or service) or asking you to donate to a cause. Coronavirus scams are a prime example of this: numerous companies encouraged consumers to e-transfer money to buy vaccinations, personal protective equipment, and testing kits that were never delivered.

Data encryption uses many layers. This suggests that data is encrypted multiple times to prevent theft or hacking en route to the recipient.

  • It is preventing fraud. Reliable e-transfer firms will ask you security questions, provide a unique code, or verify your identity. This is to confirm that your money transfer is secure. Transferring money to a suspect recipient or logging in with a new device might lead to fraud.
  • Verification of identity. If the service demands a secure password or logs you out after a certain length of time, it might be a positive sign that they take care to keep your money safe throughout the process.
  • It is a clearing House Automatic (ACH). In the United States, the Automated Clearing House (ACH), an independent entity that provides secure financial data transmission, processes all online banking transactions, including online money transfer services.

Several providers provide varied levels of safety, such as confirmation phone calls to both parties (who must verify sensitive information), confirmation emails, and even insurance plans that guarantee your money will be paid. Some providers restrict how much or how little money may be sent and how much money can be moved at a particular time.

The sector is regulated, with many agencies issuing licenses to money transfer companies. As a result, it is critical to choose trustworthy, regulated money transfer firms.

While sending an e-transfer, the sender is responsible for the following:

  • Provide the receiver with an appropriate email address.
  • It incorporates a solid security question and answer that is difficult to guess and is known only to the sender and the recipient.
  • The password or code is not included in the message that accompanies the transmission.
  • Ensure that the receiver only knows passwords or codes. This includes eliminating readily accessible or guessed information such as names, birth dates, places of employment, etc.

Identity Theft & E-Transfers

Criminals can steal money from your bank account or charge your credit cards if they gain access to your debit or credit cards or personal financial information such as account numbers, passwords, or Social Security numbers.

They can even commit identity theft by taking out loans and applying for credit cards in your name.

Identity theft may severely harm your credit and financial reputation, and rebuilding your good credit and reputation might take years. Identity thieves, according to the Federal Trade Commission (FTC), employ a variety of tactics to obtain your personal information, including:

Criminals will dig through your trash, seeking bills or other personal information. Identity thieves can obtain information such as bank account numbers, health insurance cards, and credit card numbers by stealing mail. If they have access to sensitive information, such as your Social Security number, they may be able to construct a new identity.


Criminals impersonate financial institutions or corporations and send you spam emails or pop-up messages to fool you into disclosing personal information.


Criminals employ various methods to install malware on another person’s device. Malware includes viruses, spyware, trojans, and keyloggers, allowing a criminal to access your device and its stored data.

Changing the Address on Your Mail

This is when crooks fill out a change of address form to redirect your billing statements to a different mail location they control.


Criminals obtain credit or debit card details by processing their cards with a particular storage device known as a skimmer. Skimmers can be deployed at gasoline pumps or ATMs to capture card data. Several devices function similarly to point-of-sale systems.


Criminals steal wallets or purses, mail, bank or credit card bills, pre-approved credit offers, and other items to gain your personal information.

Remember that fraudulent transactions on your account do not always imply that your identity has been stolen. It might be a one-time theft incident that is easily remedied. Call your bank immediately if you feel you have been the victim of theft.

How Do Banks Investigate Unauthorized Money Transactions?

Internet banking fraud is significant, but it must first be discovered before a bank can investigate an unlawful transaction. Fraudsters frequently start small — by carrying out a minor transaction that is less likely to be found. A fraudster may hijack a card number for years, purchasing tiny recurring subscriptions or gift cards to resell. If they go unnoticed (due to the consumer failing to check their card statements regularly), the fraudster might feel secure in going even further.

The bank might launch an inquiry when it becomes aware of a contested or unlawful transaction. You will be requested to give information on the illegal charge(s) and any evidence that the account is fake.

The regulations governing how banks handle unlawful transactions differ by jurisdiction and nation. Therefore, understanding your rights as a customer in your country is critical.

In the United States, the Electronic Money Transfer Act of 1978 stipulates that liability is limited to $50 if fraud is notified within two days of the statement. Liability is restricted to $500 if notified after two days but within sixty. However, if reported after 60 days, the customer is accountable for any fraudulent behavior, emphasizing the need to examine your financial activities frequently.

After a bank knows about the fraudulent charges and has received the necessary documents, they should respond to the dispute within 30 days. Most banks will have up to 90 days to investigate and correct the issue.

The bank’s internal credit fraud detectives usually handle the case and are trained to establish whether and how fraud has occurred. Depending on the nature and scope of the scam, the bank may opt to engage law enforcement authorities.


How to Protect Yourself From E-Transfer Theft

While sending or receiving money, you should always proceed with prudence. Follow these guidelines to avoid e-transfer theft:

  1. Send money only to people you know and trust, just like cash. Never send money to unknown people.
  2. Contact the individual asking for money to confirm their identification. Check that you are sending it to the correct email address/person.
  3. Choose a security question with a difficult-to-guess answer. This includes omitting things like names, birthdays, hometowns, etc. Only use something that someone may deduce from your social media platforms.
  4. The answer to the security question should be excluded from the e-transfer message.
  5. The answer to the security question should be excluded from the e-transfer news.
  6. Always choose a strong password that cannot be readily guessed or found, and only share it through a secure channel. Set firm and unique passwords for all your accounts, including email and social media. Do not save any personal information on public computers.
  7. Be wary of suspicious emails. Only send confidential information if you are sure it is authentic. Never click on a link in an unexpected email or text message.
  8. Please don’t call the phone numbers mentioned in unwanted messages, either. If you need clarification on whether a message is legitimate, look up the organization’s phone number or website and find out for yourself.
  9. Do not call the phone numbers mentioned in unwanted messages, either. If you need clarification on whether a message is legitimate, look up the organization’s phone number or website and find out for yourself.
  10. Individuals aren’t always who they claim to be. Please always proceed with care and conduct more research before making any payment.
  11. Please be careful with any requests for money upfront. When approached by a person or ‘business’ offering something you have yet to ask for, sign up for, or expect, be especially cautious. Uninvited approaches for information should always be questioned since they might be frauds. Instead, you can use a trustworthy email or phone number to contact the organization directly to ensure the request is genuine.
  12. Banks or reputable institutions, such as the police, would never contact you to request your PIN or full password or to transfer funds to another account. Be cautious of any caller or message requesting your PIN or personal information over the phone or by email.
  13. Sign up for fraud alerts with your bank institution to spot questionable behavior on accounts.
  14. Examine the website or email address. Examine the website address or the sender’s complete email address to ensure it is accurate. Check for HTTPS and avoid websites that still use HTTP.
  15. Please keep an eye out for spelling or grammar mistakes. Banks and merchants will proofread their emails to ensure professionalism. Spelling, grammar, and punctuation mistakes might indicate a hoax.
  16. If someone tries to rush you, please be aware. For example, if you are told that you must act “soon” before an offer or product expires or that your money “is not safe” and that you must “transfer it to another account.” Only crooks will try to scare you about your finances; legitimate outlets will not. Hence, avoid falling for the ruse and acting on instinct. Please keep calm, take a deep breath, and research the allegation individually.

What to Do If You Are A Victim of E-Transfer Theft or Fraud

What Should You Do If You Have Been a Victim of E-Transfer Theft or Fraud?

The first thing you should do is contact your bank or financial institution right away. Inform them of the problem and inquire whether you may get your money back after being scammed online. Be careful to stop any recurring payments and consider freezing any compromised accounts.

Updating your passwords elsewhere, including social media, is also a good idea. Please contact the police if you think your identity has also been stolen. You may also report the fraud to the appropriate authorities in your country. As an example:

In United States

You might call one of the three major credit bureaus to see if a fraud warning should be placed on your records. This will keep identity thieves from creating new accounts in your name. Equifax, Experian, and TransUnion are the three major credit bureaus.

Any suspect interactions should be reported to the Federal Trade Commission. may offer a tailored rehabilitation plan, assistance, progress monitoring, and prefilled documents and letters.

In United Kingdom

If you have been waiting to hear from your bank for eight weeks, you can file a complaint with the Financial Ombudsman Service. If your bank has written you a rejection letter and has suggested that you contact the ombudsman, it may be possible to get aid sooner. Citizens Advice Scams Action and Action Fraud are two more critical UK-specific sites.

In Australia

In Australia, IDCARE is a free service that will work with you to develop a plan to lessen the damage identity theft causes. Scam Watch, an Australian Competition and Consumer Commission service, collects information regarding scams in Australia. Your submission assists Scam Watch in developing scam warnings to warn the community.

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