Remitly Fraud

It’s easy to think of money as a purely abstract, digital resource—right up until you have to send some to a different country. Regulations, exchange rates, and technological limitations can make it challenging to transfer money across great distances, so it’s not surprising that solutions like Remitly have been taking off in popularity.

Remitly’s platform is designed to make it easy and safe to remit funds to recipients far and wide, but fraud and scams can be found anywhere money is changing hands at high velocity. How are fraudsters targeting Remitly users, and what can be done to stop them?

Remitly has seen considerable growth in its ten years of existence as an app-based alternative to traditional international money transfer services like Western Union.

There are about 2.4 million users active on Remitly, most of them based in the U.S. and using the app to send money to relatives in India, Mexico, the Philippines, and other countries.

Competitive rates and convenient service have fueled this growth. By partnering with local businesses, Remitly is able to offer a wide range of locations where recipients can pick up funds.

One thing about fraudsters is, they always follow the money. The more people use Remitly, the more fraudsters will target the platform and its users. While merchants may be unlikely to use Remitly for their commercial transactions, it’s still important to know how the social engineering techniques and other low-tech attacks employed by fraudsters can be effective across so many different formats and render even the most sophisticated technological defenses moot.

How Is Remitly Vulnerable to Fraud?

From what we can tell, Remitly is being diligent and responsible about securing its platform to protect users from fraud. They are registered to provide financial services and transmit funds in the U.S, the U.K., and Canada. Remitly requires that its users submit identification documents and uses 256-bit SSL encryption to protect the data it handles.

This is all very good to hear and speaks well of Remitly’s commitment to security. The problem is that when it comes to wire fraud, the most pernicious and persistent scams are the ones where the fraudsters communicate directly with the victim and convince them to send money willingly.

There’s no technological fix for this kind of scam, and you can’t get a chargeback on a wire transfer—once the recipient claims their funds, there’s not much the sender or their bank can do to recover it.

The remedy for this kind of fraud is education: making sure that users know how these scams work and how to recognize the early warning signs that they’re being targeted.

What Are Some Typical Remitly Scams?

Fraudsters have no reason to reinvent the wheel on Remitly. Most of the scams listed below will be familiar to anyone who has dealt with wire fraud. However, many Remitly users will be unfamiliar with these scams if they haven’t encountered them before.

Grandchild in Peril

The scammer contacts the victim claiming to be a close friend or relative who has been injured or detained in a foreign country and needs immediate financial assistance.

You’re in Legal Trouble

In this scam, the fraudster claims to be from a law enforcement agency, the IRS, immigration, or some other intimidating government body, and threatens the victim that they may be arrested and imprisoned if they don’t immediately pay a fine via wire transfer.

The Sweepstakes You Didn’t Know You Entered

Scammers will frequently tell victims that they’ve won a lottery or sweepstakes with a valuable prize, but they need to pay taxes or fees on it before they can claim it.

This Charity Does Not Exist

Fake charities will sometimes appear, often in the wake of major disasters or tragedies, soliciting direct donations.

Caught in a Bad Romance

Romance and dating scams are common, too. The fraudster will pretend to be romantically interested in the victim, engaging in “love-bombing” and other techniques to earn their trust. Once the victim is hooked, the fraudster will pretend to have some sudden emergency and ask for financial help.

Money for Nothing

Many scams are based on convincing the victim to send money in advance of a larger reward that will never arrive. It may be simple merchant fraud (i.e. collecting payments on goods that will never be delivered) or it may come in a more convoluted form involving “mystery shopper” jobs or helping somebody move their vast fortune out of an embattled country. Sometimes the fraudster will “pay” in advance with a bad check and ask the victim to send back overage funds before the check bounces.

Gone Phishing

All of the above scams are premised on getting the victim to send a wire transfer to the fraudster. The other type of fraud that Remitly users should watch out for is phishing attacks that try to trick them into giving up their account credentials. For example, the fraudster might send a fake “verify your information” form via email. If the fraudster can access the victim’s Remitly account, they’re free to send as much money as they can to bank accounts under their control.

How to Spot a Remitly Scam in Progress

Any emails, texts, phone calls, social media messages, or other communications that fit the patterns described above should immediately be considered suspect.

If an individual or company you know is asking you to wire them money, always reach out to them independently through a verified communication channel to confirm that the request is valid.

Common sense can often help steer you away from wire fraud. If something doesn’t look or feel right, wait and confirm the information before sending money. Remember that email addresses and social media accounts can always be hacked or spoofed. Bad grammar and misspellings in “official” communications should be viewed with suspicion. Requests for urgency or secrecy are always red flags.

Conclusion

Wire fraud doesn’t always intersect with the world of credit card payments and chargebacks, but fraudsters could care less about payment categories. They’ll go wherever they can find opportunities to exploit people and steal their money.

Keep in mind that the scams that afflict Remitly users can be used to engage in identity theft, account takeover, and other attacks that merchants do need to worry about. Fraud is always shapeshifting and finding ways to flow around security measures. The more you know about how to recognize it, the easier it will be for you to detect and stop new forms of fraud when they appear.

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