Content Written By: April Wilson, Ryan Winter LLC contributing writer
Jacksonville title companies and title companies around Florida and the U.S. are constantly evolving to help their clients experience a safe and secure closing on their home. With changes to the closing process initiated to cope with COVID-19 social distancing, there’s more opportunity than ever for online, email and money wiring scams. US Patriot Title, a title company in Florida, is committed to providing a safe environment for both in-office and eClosing processes.
What is Wire Fraud and How Does it Happen During the Home Buying Process?
Wire fraud is one facet of financial cyber threats. The FBI says cyber threats that lead to business e-mail compromise (BEC) and wire fraud are organized through “crime groups” that target both “large and small companies and organizations in every U.S. state and more than 100 countries around the world.” The FBI goes on to note that the “losses are in the billions of dollars and climbing.”
According to the FBI, these schemes are conducted by “transnational criminal organizations that employ lawyers, linguists, hackers, and social engineers.” The most common strategy is for the criminal organization to “target employees with access to company finances and trick them into making wire transfers to bank accounts thought to belong to trusted partners.”
In the Case of Real Estate Transactions:
The buyer is targeted and tricked into wiring their money into an account the buyer believes is associated with the closing transaction.
CNBC covered in their article, “How one family’s nightmare illustrates the growing threat of real estate wire fraud,” a real estate wire fraud transaction that occurred to a couple in the U.S. The article talks about how a couple, after finding the home of their dreams, was set to buy and close on the home. The couple was in email contact with their Realtor, mortgage company, title company and attorney. The article explains that a scammer found its way into the email conversations, faked emails that looked legitimate, got ahold of the closing documents and sent wiring procedure documents to the buyers. The buyers, thinking they were still corresponding with the team of real estate professionals, wired the money according to the wiring procedure emailed to them. Days later the mistake was discovered.
The FBI said in their 2016 internet crime report that California, New York and Florida were the top states for internet fraud. Billions of dollars are lost every year to wire fraud.
The National Association of Realtors reported on additional FBI data, “About 11,300 people were victims of wire fraud in the real estate and rental sector in 2018 (a 17% increase over 2017), with losses of more than $150 million, according to FBI data.”
Visit the FBI’s Internet Crime Complaint Center, www.ic3.gov, for more information or to submit a complaint.
How to Protect Yourself From Real Estate Wire Fraud
Using a secure platform instead of email, or at least a secondary authentication for getting into your email, is vital to keeping yourself and your customers safe from cyber-security threats.
Secure platforms help keep malware out of less secure systems, such as email. This helps fight against a scammer’s ability to get into the system, send fake yet legitimate-looking emails and get access to sensitive data and documents.
Everyone should be looking out for emails that look slightly different. The FBI says scammers will oftentimes change only one character within an email address, making it difficult to notice the difference. Keep a careful eye out for slight and minute differences.
The Florida Bar suggests using “unique, complex, randomly generated passwords.” The Florida Bar also recommends not replying to emails, but creating a new email or forwarding the email and manually typing out each email address for correctness.
Be leary and cautious of links with-in emails and phone calls from people you have not spoken with, who say they are from one of the companies you are working with.
The number one tip suggested by cyber-security professionals is to always make in-person or phone contact before sending sensitive data or money anywhere. Calling members of your real estate team to verify the sending procedures can catch potential issues or scammers in their tracks. It’s an extra step, but it can potentially save you or your clients hundreds of thousands of dollars. If a scammer found their way into the communication system and sent fake wiring instructions, a simple, verification phone call would catch the fake instructions and expose the email hack.
NOTE: Make sure to look up the legitimate phone number for the person you’re calling. Don’t rely on the phone number in the signature of the email in case the hacker forged the number. Use the company directory or a previous number you’ve used to contact the person you need to reach.
Lastly, when in doubt use a cashier’s check, and deliver it in person during the closing.
US Patriot Title, in the interest of their customers, uses two, notable security platforms to help fight against cybersecurity threats. Qualia and Pavaso help US Patriot Title conduct secure closings both in-office and remotely. US Patriot Title uses Qualia’s cloud-based technology to securely send and receive messages and documents, and it uses Pavaso’s full-service closing platform for secure and certified eNotary and eClosing solutions.
Qualia’s explains on its website how their customers’ data is protected:
ALTA Pillar 3 Compliant Privacy: Qualia keeps your client data private and verifiably restricts it from unapproved third-party access.
Two-Factor Authentication (2FA): An extra layer of sign-in security further prevents anyone from accessing your accounts without your permission.
AES-256 Data-at-rest Encryption: The “out of the box” protections are best-in-class so you can be confident your data is secured from external bad actors.
Secure Built-In Communications: Keep your client funds safe from the rise in external Business Email Compromise (BEC) scams.
Using secure platforms like Qualia’s and following the tips above is key to keeping yourself and your customers safe from cyber-security threats.
For more information on cyber-security threats and wiring fraud go the FBI’s IC3 website.
