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FEDERAL RESERVE BAN K OF DALLAS DALLAS. TE X A S 75222 Circular No. 81-125 June 23, 1981 A REMINDER CONCERNING ATTEMPTS TO PERPETRATE FRAUDULENT TRANSFERS OF FUNDS TO ALL DEPOSITORY INSTITUTIONS IN THE ELEVENTH FEDERAL RESERVE DISTRICT: There continue to be periodic attem pts to perpetrate fraudulent trans fers of funds throughout the banking system. Consequently, it continues to be im portant th at all depository institutions periodically review their internal procedures regarding wire transfers of funds operations in terms of protection against fraudu lent transfers of funds. The following suggestions are provided for your consider ation when reviewing your operations: Code word authentication lists should be secured and should not be avail able or accessible for unauthorized persons to see, copy, or steal. Telephone requests for transfers from your customers should be authen ticated or verified in some fashion. Employees should report any transfer request that seems unusual or out of the ordinary to their management. Employees should be instructed not to give out any information on in ternal transfers of funds procedures or authentication code word lists or procedures. Employees should be positive that it is the Federal Reserve Bank call ing when receiving incoming transfers of funds notification. If there is any question that a telephone notification is unusual or potentially questionable in any manner, e.g., an usually large or third-party trans fer, a return collect telephone call to the appropriate Federal Reserve office in this District should be made for verification. (Depository in stitutions are reminded that, in regard to confirmations by them of tele phone advice from this Bank of the receipt of third-party transfers, an important provision of paragraph 15 of Bulletin 6 is the establishment of transferee liability in the event there is no call back (by the depos itory institution) on telephone advice from this Bank). Banks and others are encouraged to use the following incoming W A T S numbers in contacting this Bank: 1-800-442-7140 (intrastate) and 1-800-527-9200 (interstate). For calls placed locally, please use 651 plus the extension referred to above. This publication was digitized and made available by the Federal Reserve Bank of Dallas' Historical Library (FedHistory@dal.frb.org) - 2 - In some of the most recent attem pts to perpetrate fraud through the wire transfer system, a TWX or TELEX wire was utilized to initiate instructions from a commercial bank. However, as pointed out in our Bulletin 6, TWX and TELEX messages normally will not be honored. Requests utilizing these means of transmission should not be made and will be accepted only where prior arrange ments have been made or in emergency situations. We continue to emphasize the need for all depository institutions to be security conscious and remain alert for possible attem pts to obtain funds by means of fraudulent wire transfers of funds. While it is realized that many institutions do not utilize the Federal Reserve wire transfer services, it is hoped that the sug gestions contained in this circular will be helpful in evaluating your current expo sure regardless of the method your institution utilizes in transferring funds. If you have any questions regarding this m atter, please contact Allan Neale at the Head Office, (214) 651-6334, William L. Wilson at the El Paso Branch, (915) 544-4730 Ext. 201, C. O. Holt, Jr., at the Houston Branch, (713) 659-4433 Ext. 44, or Tony G. Valencia at the San Antonio Branch, (512) 224-2141 Ext. 402. Sincerely yours, William H. Wallace First Vice President
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