Inside the scams that trick victims into sending money—and how smart limits can stop them

Fraud has changed. It’s no longer a game of brute force attacks or cracking complex code. Today’s fraud is psychological. It doesn’t require breaking into systems — it requires breaking into people.

In the United States, fraudsters have become masters of social engineering. They manipulate emotions, build false trust, and create urgency to convince people to hand over their money willingly. The scary part? Victims don’t even realize they’re authorizing fraudulent transactions until it’s far too late. And by the time a report is filed, the money is often gone — moved through layers of money mules or wired overseas.

This post takes a closer look at how these scams work, why they’re so effective, and what financial institutions can do to catch them at the most crucial moment: before the money leaves the account.

What we share here isn’t based on theory or abstract case studies. It’s informed by real-world experience working with one of the top banks in Northern Europe, as well as conversations with fraud experts across Europe and the U.S. In total, we’ve spoken with more than 10 banks and financial institutions. The patterns are clear — and they're consistent, regardless of geography or platform.

Social Engineering Is the Modern Fraud Toolkit

At the core of these scams is a simple idea: trust. Fraudsters don’t hack systems — they hack people. They use social engineering tactics to gain access, convince, and manipulate. It starts with research. Scammers routinely purchase hacked data — including names, phone numbers, Social Security numbers, and bank details — for pennies on the dark web. They use that data to impersonate trusted figures: a bank employee, a government agent, a company executive.

The goal is to sound legitimate enough that the victim doesn’t question the request. And it works. Unlike mass phishing campaigns of the past, today’s attacks are often targeted and highly personalized. The more specific the data, the more convincing the scam.

One increasingly common tactic is “pretexting,” where fraudsters pretend to be someone in authority — your bank, your boss, your landlord — to get you to reveal information or take action. Others use automated voice response systems (IVR) that mimic actual banks. Some even offer incentives, posing as someone with a “job opportunity” or “easy money” scheme, to get victims to hand over their card details.

Fraudsters Know Who to Target — And Why

Not all victims are random. Scammers choose their targets carefully, based on vulnerability and access to money. Young adults between the ages of 19 and 25 are common targets, especially on platforms like Instagram, TikTok, and Snapchat. Many are drawn in by promises of quick cash or investment schemes that seem too good to pass up.

College students, single parents, and newly enlisted military personnel are also frequently targeted. These groups tend to face financial pressure and may lack experience with financial institutions, making them more susceptible to manipulation. And then there’s the other end of the spectrum — high-net-worth individuals in affluent areas like California’s Bay Area. Fraudsters go where the money is, and they focus their energy on people who can send large sums quickly.

The common thread in all of these scams is emotion. Fear, urgency, and excitement are tools. If you believe your account is under attack or your identity is at risk, you're far more likely to act without thinking. That’s exactly what fraudsters are counting on.

The Anatomy of a Scam: A Fraudster’s Journey

Every successful scam follows a pattern. It begins with a point of contact — usually a phone call, text, or message on social media. From the very beginning, the fraudster works to build trust. They might introduce themselves as a representative from your bank and reference recent transactions to gain credibility. Once they’ve established that trust, the pressure starts.

Victims are told that something urgent is happening — their account is compromised, they’ve missed a payment, or someone is trying to steal their identity. The message is clear: act now or lose everything. This urgency is designed to bypass critical thinking. The goal is to push the victim to take immediate action, whether that means confirming login credentials, approving a wire transfer, or providing access to a device.

The final step — and the one that matters most — is the “money out” moment. This is when funds are transferred from the victim’s account, often to international destinations. To avoid detection, fraudsters often route money through multiple accounts using “money mules.” These intermediaries are either complicit or unaware that they’re part of a larger laundering scheme.

Once the money is gone, the clock starts ticking. Victims typically have only minutes to report the fraud if they want any chance of recovery. By the time a bank investigates or contacts law enforcement, the money is long gone.

This pattern — initial contact, trust-building, urgency, and fast fund movement — has been confirmed across every institution we’ve spoken to. From leading banks in Scandinavia to major players in the U.S., the blueprint is remarkably consistent.

Where the System Breaks: Regulatory and Technical Gaps

One of the biggest problems facing U.S. consumers is that the legal framework isn’t built for this kind of fraud. The Electronic Fund Transfer Act (EFTA) is designed to protect consumers in cases of unauthorized access. But if you’re tricked into sending money — even under false pretenses — banks aren’t required to reimburse you. In other words, being deceived doesn’t qualify for protection under current rules.

Commercial accounts are governed by a different standard under the Uniform Commercial Code, which places more responsibility on banks to ensure secure processes. But even here, if a bank can show it followed a “commercially reasonable” procedure, the liability often falls back on the customer.

The result? A regulatory gray zone that favors the fraudster. And platforms like Zelle, which enable instant peer-to-peer transfers, are especially vulnerable. According to recent reports, Zelle customers have lost nearly $870 million to fraud since the service launched — and many never recovered their funds.

The Case for Smarter “Money Out” Controls

So how do we stop these scams? The answer lies at the choke point — the moment when money is about to leave the account. This is the critical phase where intervention can make a difference.

Most banks already impose daily limits on ATM withdrawals and electronic transfers. But these aren’t enough. Fraudsters get around them by convincing victims to authorize wire transfers, which often have much higher limits. The solution isn’t stricter limits across the board — it’s more intelligent limits based on context and risk.

For example, if a customer is sending money to a new recipient, or initiating a large transaction for the first time, that should raise a flag. If the transaction is international or happens at an unusual time, banks should trigger extra verification steps. A quick phone call, a second-factor confirmation, or even a temporary hold could buy the time needed to prevent fraud.

These recommendations aren’t theoretical — they’re based on what works. Every fraud expert and risk analyst we’ve spoken with agrees: the “money out” moment is the last chance to make a difference.

Security Shouldn’t Come at the Expense of Experience

There’s always a trade-off between protection and convenience. Nobody wants a bank that makes it difficult to complete a legitimate transfer. But that’s why smarter, risk-based systems are so important.

The goal isn’t to block normal activity — it’s to make risky transactions a little harder. Think of it like fraud detection in motion: invisible most of the time, but always ready to step in when something doesn’t feel right.

Education plays a role, too. Customers need to understand how scams work. Regular updates, clear alerts, and in-context warnings can make a real difference. The same goes for employees. Bank staff should be trained to recognize manipulation techniques and respond confidently when something feels off.

What Happens Next

Social engineering scams aren’t going away — if anything, they’re getting smarter. But banks have an opportunity to fight back, not just with better technology, but with better timing.

The moment money is about to leave a customer’s account is the last line of defense. Done right, enhanced “money out limits” can stop fraud in its tracks without adding unnecessary friction.

For banks, this isn’t just about security. It’s about trust. Customers want to feel protected. Institutions that take proactive steps to defend against social engineering won’t just reduce fraud losses — they’ll build stronger relationships, create peace of mind, and stay ahead in a world where trust is everything.

Learn more about how Enlace's Money Out Limits can help your bank.

The insights in this post are based on industry research, conversations with banks and fraud prevention experts, as well as our own experience. The content is for general information only and not intended as legal, financial, or technical advice. While Enlace strives for accuracy, the information may not reflect the latest developments.