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Fraudsters Steal Millions from Xoom

Federal investigators have been called to probe a security breach involving a $30.8 million fraudulent transaction at online money transfer site Xoom, reports say.

According to Xoom, a one-time $30.8 million charge in corporate cash was sent to overseas accounts by unknown assailants, the money transfer provider said in its annual filing to the Security and Exchange Commission.

The company found on Dec. 30 of last year that “it had been the victim of a criminal fraud” after discovering that suspected fraudsters impersonated Xoom employees and issued false requests to transfer the funds from its finance department to foreign accounts, according to the filing.

The filing, issued on Monday (Jan. 5), additionally reports that there is no indication that “customer data was involved nor was any customer’s money involved in this matter and the Company’s systems were not impacted.”

Internal procedures have been put in place following the breach, the filing says, but federal officials have launched a criminal investigation into the case.

Xoom announced the security breach at the same time it revealed the company’s Chief Financial Officer has resigned, effective immediately, though the report did not indicate whether that resignation had anything to do with the alleged fraudulent charges.

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New PYMNTS Report: Preventing Financial Crimes Playbook – July 2020 

Call it the great tug-of-war. Fraudsters are teaming up to form elaborate rings that work in sync to launch account takeovers. Chris Tremont, EVP at Radius Bank, tells PYMNTS that financial institutions (FIs) can beat such highly organized fraudsters at their own game. In the July 2020 Preventing Financial Crimes Playbook, Tremont lays out how.

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