Our client's can sign Faxed Wire Agreements that authorize us to intiate wires on the behalf or our clients based on faxed instructions. We referr to the Faxed Wire Agreement for follow up procedures and call back instructions. I was wondering how other banks handle faxed wire requests, and what those banks do in the event that a client wants to request a wire via fax but has not previously filled out the faxed wire agreement.

Our faxed requests must have a copy of a valid DL, signature and clear instructions. Also included must be a call back number.

We verify what the customer sent, check OFAC, check signature cards & wire/transaction history. We verify collected funds, etc. The call back number has to match something that we already have on file, or have a good reason that's its different.

We consider these exception wires, and they get reviewed multiple times. Before we send out the wire, we have to speak to the customer, and verify the information.

We've received a couple of fraudulent faxed wire requests on different accounts in the last couple of years complete with what appeared to be the signature of valid signers. The information on both was gathered via social engineering.

We also treat theses as exception items subject to independant verification, and fortunately did not suffer any losses.

Just be aware that facsimile transmissions without a written wire transfer agreement that sets forth commerically reasonable security procedures will leave the bank holding the bag on any of these wire transfers if the customer later claims they were unauthorized:

UCC 4A

§ 4A-201. SECURITY PROCEDURE.
"Security procedure" means a procedure established by agreement of a customer and a receiving bank for the purpose of (i) verifying that a payment order or communication amending or cancelling a payment order is that of the customer, or (ii) detecting error in the transmission or the content of the payment order or communication. A security procedure may require the use of algorithms or other codes, identifying words or numbers, encryption, callback procedures, or similar security devices. Comparison of a signature on a payment order or communication with an authorized specimen signature of the customer is not by itself a security procedure.

§ 4A-202. AUTHORIZED AND VERIFIED PAYMENT ORDERS.

(b) If a bank and its customer have agreed that the authenticity of payment orders issued to the bank in the name of the customer as sender will be verified pursuant to a security procedure, a payment order received by the receiving bank is effective as the order of the customer, whether or not authorized, if (i) the security procedure is a commercially reasonable method of providing security against unauthorized payment orders, and (ii) the bank proves that it accepted the payment order in good faith and in compliance with the security procedure and any written agreement or instruction of the customer restricting acceptance of payment orders issued in the name of the customer. The bank is not required to follow an instruction that violates a written agreement with the customer or notice of which is not received at a time and in a manner affording the bank a reasonable opportunity to act on it before the payment order is accepted.

c) Commercial reasonableness of a security procedure is a question of law to be determined by considering the wishes of the customer expressed to the bank, the circumstances of the customer known to the bank, including the size, type, and frequency of payment orders normally issued by the customer to the bank, alternative security procedures offered to the customer, and security procedures in general use by customers and receiving banks similarly situated. A security procedure is deemed to be commercially reasonable if (i) the security procedure was chosen by the customer after the bank offered, and the customer refused, a security procedure that was commercially reasonable for that customer, and (ii) the customer expressly agreed in writing to be bound by any payment order, whether or not authorized, issued in its name and accepted by the bank in compliance with the security procedure chosen by the customer.

banks should never take fax authorizations for wire origination unless they have an agreement in place with the customer that stipulates the method of verification, such as PIN call back or security codes.

We've stopped taking any faxed instructions because of a few significant frauds.

We will accept them but only from those that have a signed written agreemnt on file. Also, we do a callback only to those that are authorized and named in the agreement and they can verify the amount and the receiver. If we are unable to reach them we will not send the wire.