When people get scammed and money is transferred out of their bank, why isn’t there a paper trail? If the money is transferred into some foreign country that won’t allow tracing, why not just exclude those countries from the banking system?
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The same reason Amazon has turned into worse than AliExpress. Why YouTube, Facebook and Google allow scammers to buy ad space. They make more money off of people (scammers) with money.
So a lot of people are explaining part of your question but I will probably add something about the other half. Excluding countries from our banking system for a few scams is basically asking for conflict. The fact is that to exclude a country from banking is basically excluding them from all trade and if that was something you did without major provocation then our whole global economy wouldn’t function.
It’s been a long time since I was in school but I reckon it’s got to do with the innocent parties who get involved, and also some archaic rules about tracing (which idk if are applicable everywhere but we’re applicable when I was in uni in the last decade). So the moment the money is transferred to an innocent third party in a bona fide transaction, the court – even if it’s a cooperating country – won’t damage the innocent third party to restitute you. It’s not their fault. And the bank won’t suffer loss to compensate you – it’s not their fault either. And thus you – the OG victim – are up shit creek. And the rules of tracing require that funds be identified. So I think the problem used to be that digital currency is interchangeable – ie $1 in a bank account doesn’t exist – there’s no specific ID number to correspond to a specific $1 bill (which is unique) and thus iirc banks rely on this loophole to say you can’t trace electronic currency because it can’t actually be distinguished from all the other currency in the bank. Pls correct me if I’m wrong tho this isn’t my area of practice but I remember it bugged the hell out of me when I was learning it.
>why not just exclude those countries from the banking system?
Because the economic value of including the banks in those countries is always much larger than the economic value of the particular transfers you’re referring to. If the scams are actually a sizable proportion of all transactions with that country (or with any particular single bank in any country, including our own) and it is legally certainty the transactions are “scams” rather than legitimate transfers that are considered mistakes by the transferees in retrospect and regretted, then those destinations are excluded from participation in the transfer system.
Many scams depend on the victims making a cash withdrawal from their bank and then converting the cash to a different medium such as gift cards, Western Union transfer, etc. As far as the victim’s bank is concerned, it’s their customer making a cash withdrawal, thus no paper trail exists.
In those cases where the scammer is able to move funds directly from the victim’s account to the scammer’s account, the scammer will quickly move that money through multiple banks, often offshore or withdraw it as cash. Even if the banks can trace it there won’t be anything left to recover.
There are also banking security and privacy laws at play, requiring law enforcement to serve a search warrant on each bank in the chain which gives the scammer quite a head start.
Look up the story of how a bunch of hackers almost stole close to a billion dollars draining the central bank of Bangladesh’s entire account. There’s an investigative piece on it by the BBC and a really good podcast too. It’s amazing how advanced these financial scams can be.
They open a bank account and then withdraw the cash immediately and then close the account. They use fake IDs and info to open the account so basically they withdraw the cash and if they use lackeys to do that then that person goes down and the others don’t
The person who got scammed agreed to sending the money. So, sadly, it’s on them. Zelle and all of that makes you consent to the transfer. Once it’s done, it’s done. Otherwise, you could pay someone with Zelle and immediately claim fraud and always get your money back.
Same with wiring money or buying gift cards. It sucks but .. not sure what you can really do
Lot of good answers already but the real question is how was the money transferred? Did they get your credit card info? Did they actually use your online banking?
If the first is the case: might not be your bank that’s responsible. If it’s the second: The bank has a lot of info about how you use your online banking. Browser? Security? App? Cell phone tower? IOS or Android? They have that info and probably more. That way it’s easy to see if there was an irrgularity when logging in. But what if you messed up by ordering that extralarge sexdoll and try to get the money back without your wife knowing? That has to be checked as well. YOU could be the fraud.
And lastly. Your bank knows where the money went. They do not know who own’s the account. The other bank usually has to stick to some sort of data protection rules that safeguards their customers. And in order to get that youlneed some kind of warrant. And until then it’s usually too late.
Tl;dr: easier said than actually done
Paper trails exist. The laws and the rules change and may not be in your favor.
Let’s say someone steals 10k from your bank account in the US and wires it to the UK. That thief then pays a legitimate bill from the account in the UK to a vendor in New Zealand.
We know where your money is. But does that mean you have the right to take the money back from the NZ company who legitimately got paid for something they did?
Or another example where things vanish.
You get 10k stole and moved to another account in the US. That account was also hacked because some old person made a password of “123money”. That account then wired the money to a UK account. That account was also stolen. Now the money is wired to Cuba.
While the US and Cuba have no relations (and won’t work together) the UK does not have that level of gripe. So what do you do. Who cuts who off? Etc.
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