The wire fraud crisis that the real estate industry has been facing for several years does not appear to be slowing down. In ALTA’s recently-released 2021 Wire Fraud and Cyber Crime Survey, 76% of title agents nationwide reported wire fraud attempts were the same or increased in 2020. Perhaps even more alarmingly, the survey states that cyber criminals attempted to divert funds in at least a third of all real estate and mortgage transactions. However, the report does show that training appears to be working, as these attempts were only successful 8% of the time.
Criminals are changing their tactics constantly, which means all parties involved in the real estate transaction must be all the more vigilant. Here are a few ways to do just that:
- 1. Confirm instructions first.
As has been said in the past, wire instructions for every file MUST be sent securely to lenders, home buyers and real estate agents, AND via phone calls made to the title company to verify the instructions before any wires are sent.
Including a blurb in your title company’s email signature about following this process has proven to be an effective reminder.
- 2. Communicate & educate staff on the issue.
Emphasizing the importance of this matter to your staff and providing related training cannot be underestimated.
Employees should be instructed on how to watch for various red flags in emails, such as:
- Misspellings or poor grammar
- A stressed sense of urgency
- Last-minute attempts to change payment types or account numbers
- 3. Anticipate high-risk days/times.
Title companies must also watch for an increase in fraudulent payoff letters created in an attempt to divert funds. Fridays and especially days leading into holidays and/or long weekends are prime time for fraud attempts, as it allows the criminal more time before financial institutions reopen.
What to do if wire fraud is suspected
If a case of suspected wire fraud has occurred, time is of the essence. The sooner the matter is reported to the financial institution(s), consumers and authorities, the greater the chance for retrieval.
If reported early enough, the financial institution may be able to initiate the FBI’s Financial Fraud Kill Chain process. ALTA has also developed a variety of helpful tools here for navigating this process, including a very effective Rapid Response Plan for Wire Fraud Incidents and accompanying customizable worksheets. Please note that an ALTA member login may be required to access these resources.
In our current times, preparation is vital and there is no such thing as being too careful.
Here at Global American Title, our team is highly experienced, and it’s our job to keep a watchful eye to help ensure your closing goes as smoothly as possible. Contact us today!
