Wire fraud isn’t exactly new, but it is definitely becoming more common - especially in the title industry. But, what exactly is it?
In its most basic form, wire fraud occurs when scammers use various telecommunication or online tactics to intercept money. They engage with unsuspecting individuals via a phone call, email, or text message, etc. while fraudulently pretending to be someone else. In doing so, they convince the victims to transfer their money into a fake account.
Unfortunately, by the time the person realizes they were scammed, it is too late. Wire transfers cannot be reversed, resulting in devastation.
As the title industry becomes more and more digitized, it leaves room for scammers to enter the game. Here’s what you need to know about wire fraud - and what you can do to get the most protection.
Wire Fraud and the Title Industry
Wire fraud in the title industry is a growing concern as more and more title agents report these fraudulent attempts in their transactions. How do they do it? Scammers scope out MLS sites to uncover pending home sales. They can then make their way into the network of real estate agents or title companies and gather detailed information about future closings.
Although the type of communication can vary, it usually comes in the form of a very believable email that is sent to the buyer with wire instructions. As a result, the new potential homeowner excitedly wires the money needed to purchase the home - except it lands in the wrong hands.
For many on the outside, it may seem that these individuals shouldn’t have been spoofed. Or that they should even know better than to just transfer money requested by the scammer. However, the fraudulent communication looks so real, often imitating someone from the title company, a real estate agent, etc. They can be so believable that even the most cautious person can fall victim.
The more security measures are taken to put a stop to wire fraud, the more sophisticated the scammers get.
How to Protect Against Wire Fraud
While the buyers are usually the ones who become the target of these scams, title agents, as well as everyone involved in a real estate transaction, can reduce the risk of wire fraud by taking a few precautions.
Boost Awareness
It is important that everyone has an understanding of wire fraud and that they remain vigilant at all times. Even an email that doesn’t discuss wire instructions at all could be a phishing email in order to gain access to the system.
Pay attention to emails and phone calls that include:
Misspellings - especially concerning the details of important people in the transaction
A voice or tone change, whether over the phone, email, or text
Anytime multiple urgent requests are received, extra caution should be taken
Attachments or links in an email that are not commonplace
An email, text, or phone call that changes up original plans or practices
Spend time going over all of these things with the people involved in the process - including the buyer.
Have a Set Document Flow
Don’t allow shortcuts. Go through the process of preparing documents for closing using the same steps every time. This makes it easy for anything that deviates from this process to stand out.
Invest in Secure Software
Investing in secure software will allow the parties to send encrypted messages back and forth without the added risk. While it may not be a surefire answer as scam artists can perfect their craft, it will give you a much better chance of avoiding wire fraud situations.
Learn More About Wire Fraud
The team of experts at Conestoga Title stays up-to-date on all the latest news as it relates to title and real estate transactions - and that includes protection against wire fraud.
If you have questions about how to protect yourself and your clients, we are here for you. Contact us today.