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A close relative recently contacted me asking for some help transferring money overseas. He has an account here but for some reason can't transfer it directly to his account overseas (something to do with security codes, authorised payees and expired cards). He's asking to transfer it to my account, so I can then pass it on to him.

I want to help him out. He's never done anything dodgy in the past (that I know of), and is generally known for being wise with money, but at the same time my spidey senses are tingling.

What can I do to help him out, but at the same time protect myself from any potential scams?

Note: I've spoken to him on the phone, it's definitely my relative.

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    It would need more details, what country is your relative in, where are you? Which country is the money being transferred to ... Even if it is not scam; there could be taxation implications or potential issues with regulations – Dheer Sep 8 '17 at 3:00
  • I'm only interested in measures I can take to prevent any loss from known scams that follow this kind of pattern. Other potential issues can be dealt with separately – Phill Sep 8 '17 at 4:20
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    @Phill If there are potential tax implications to you personally for going through with this, it shouldn't be dealt with separately, it should be dealt with directly. If your relative would, for example, force you to get a 10% withholding tax penalty from the IRS, would you really want to pay that just because of family obligation? Asking someone to be your financial intermediary is a big red flag. There are many ways that this can go wrong, and many things which may have caused your relative to ask you - not all of them are innocent. – Grade 'Eh' Bacon Sep 8 '17 at 14:25
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    Are you ABSOLUTELY, ENTIRELY SURE it is really your relative, and not someone who has hacked his email or social media? Keep in mind if they get his email, they can usually use the email to reset his facebook, twitter, VK etc. passwords. – Harper Sep 9 '17 at 3:26
  • Do you mind telling us what eventually happened? – Martin F Feb 5 at 19:32
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"For some reason can't transfer it directly to his account overseas (something to do with security codes, authorized payees and expired cards)."

Don't become someone's financial intermediary. Find out exactly why he can't transfer the money himself, and then if you want to help him, solve that problem for him. Helping him fix his issue with his expired card, or whatever the real problem is, would be a good thing to do. Allowing him to involve you in the transaction, would be a bad thing to do.

Possible problems which might be caused by becoming directly involved in the transaction:

-The relative is being scammed themselves, and doesn't realize it / doesn't realize the risks, and either wants you to take the risk, or simply thinks there is no risk but needs administrative help.

-The person contacting you is not the relative - perhaps they are faking that person's identity, and are using your trust to defraud you.

-The person is committing some form of fraud, money laundering, or worse, and is directly trying to defraud you in order to keep their hands clean.

-The transaction may be perfectly legal, but is considered taxable in one or more countries. By getting involved, you might face tax filing obligations, or even tax payment obligations.

-The transaction may be perfectly legal and legitimate, but might accidentally get picked up as potential fraud by a financial monitoring system, causing the funds to be held, and your account to be flagged for further investigation, creating headaches for you until it becomes resolved.

There are possibly other ways that this can go awry, but these are the biggest possibilities I can think of. The only possible 'good' outcome here is that everything goes smoothly, and it works exactly as well as if your relative's "administrative problems" were solved first, and the money went through his own account.

Handwaving about why your account is needed and his is faulty is a big red flag. If it is truly just an administrative issue on his end, help him fix that issue instead.

  • If I could upvote this more times I would. – Vicky Sep 8 '17 at 21:03
  • On the other hand, this sort of thing happens all the time. For instance I needed to deposit into a large western bank. They have no branches in the State I was in - we Just Can't figure out how to do it* and I'm still in the USA*. The best they could come up with was "write a check, add a deposit slip, mail it to a branch". I know, you wouldn't believe it, but I really was on the phone with their support people and they were stumped. They were embarrassed. I also called a branch, they confirmed. – Harper Sep 9 '17 at 3:35
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    Thank you so much for this. Help him solve the problem is truly a golden nugget of wisdom. Either I fix his problem and he's happy, and he can do what he needs with his money now and in the future, or excuses start coming out and the facade starts slipping. I can't thank you enough, this is what I'll attempt to do. – Phill Sep 11 '17 at 1:01
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What can I do to help him out, but at the same time protect myself from any potential scams?

  1. Find out why he can't do this himself. Whether your relative is being sincere or not, if he owns both accounts then he should be able to transfer money between them by himself. If you can find a way to solve that issue without involving your bank account, so much the better.

  2. Don't settle for "something about authorized payees and expired cards." Get details, write them down. If possible, get documents. Then go to a bank or financial adviser you can trust and run those details by them to see what they have to say. Even if there's no scam, if what he's trying to do is illegal (even if he doesn't realize it himself) then you want to know before you get involved. You say you're willing to deal with "other issues" separately, but keep in mind that, even if there's no external scam here, those "other issues" could include hefty fees, censures on your own account, or jail time.

  3. Ask yourself: Does it make sense that this relative has an account overseas? I don't have any overseas accounts, because I don't do business in other countries. Is your relative a dual-citizen? Does he travel a lot? What country is the overseas account in? How long has he had this account? What bank is it with? Where the money is going is just as important as how it gets there (ie: through your account.) Arguably more so.

Keep in mind that many scammers tell their marks not to share what's going on with anyone else. (Because doing so increases the odds of someone telling them to snap out of it.) It's entirely possible he's being scammed himself and just not telling you the whole story because the 419er is telling him to keep it quiet. (Check out that link for more details on common scams that your relative may be unwittingly part of, btw.)

Get as many details as possible about what he's doing and why. If he's communicating with anyone else regarding this transfer, find out who. If there are emails, ask his permission to read them and watch for anything suspicious (ie: people who can't spell their own name consistently, constant pressure to act quickly, etc.)

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Let's summarize your relative's problem:

  1. For some reason he cannot legally transfer money from account A to account B, even though both are his own accounts.
  2. He can legally transfer money from A to Y (your account), and then from Y to B.

How is this possible? If both of those statements are true, then he should be able to explain exactly why those statements are true, and then you can explain it to us, and then we can all nod our heads and admit, "Wow, that makes sense. Proceed if you want to." But until that happens I suggest you take the advice I offered in the first paragraph of this answer.

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Since you mentioned that it is your close relative, he has never done enything dodgy and is wise with his money, then I would take it that you have some implicit trust in him.

Now your options in this case are limited to either saying an outright no, which may impact familial ties adversely or to do as he has requested.

One way could be to ask him for a mail requesting a short term loan and then transfer the money to his account. Then after a few days/weeks he repays the money back to your account.

Now, this may or may not be 100% black & white depending on the legalities of your country but in most countries/cultures giving and taking of personal loans between friends/families is quite common.

  • This does not address many possible risks in going through with this, regardless of whether a documented 'loan' is in place. – Grade 'Eh' Bacon Sep 8 '17 at 12:59
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Mostly ditto to @grade'eh'bacon, but let me add a couple of comments:

Before I did anything, I'd find out more about what's going on. Anytime someone tells me that there's a problem with "security codes or something", I get cautious. Think about what the possibilities are here.

  1. Your relative is being scammed. In that case, helping him to transfer his money to the scammer is not the kind of help you really want to give.

  2. Despite your firm belief in your relative's integrity, he may have been seduced by the dark side. If he's doing something illegal, I'd be very careful about getting involved. My friends and relatives don't ask me to commit crimes for them, especially not in a way that leaves me holding the bag if things go wrong.

  3. Assuming that what is going on here is all legal and ethical, still there is the possibility that you could be making yourself liable for taxes, fees, whatever. At the very least I'd want to know what those are up front.

As @Grade'eh'bacon, if he really has a problem with a lost password or expired account, by all means help him fix that problem. But become someone else's financial intermediary has many possible pitfalls.

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