We live in the cyber-era, and while this allows us to take advantage of historically unprecedented conveniences in our day to day, we are also increasingly exposed to invisible threats to our personal and financial security. Real estate transactions have become a prime target for scammers, with wire fraud becoming more and more common. At Champion Title, we take great care and act with the utmost caution to protect you from becoming a victim. Our operational and recommended best practices guard our clients by maintaining a safe and secure transaction from beginning to end. Remaining vigilant and proactive by arming yourself with the following information and tips will help you avoid financial suffering.
How does real estate wire fraud occur?
In today’s real estate industry, most transactions involve sending funds via wire transfer. Typically, buyers and mortgage lenders wire funds for purchase to the escrow agency. The escrow agency may then wire these funds to pay off the seller’s mortgage, and the remaining sum to the seller. With each wire transaction, wire fraudsters are on the lookout for an opportunity to intercept the process. Wire fraudsters most commonly attempt to impersonate one of the parties involved in the transaction, sending false wiring instructions to wire funds into their own fraudulent account. These impersonation techniques are getting more sophisticated with time.
Tips to prevent wire fraud
Education is key in preventing such a financial disaster. The below are some helpful tips and best practices to protect your money:
Be suspicious of emails requesting changes in information. A common fraudster practice involves spoofing a mortgage lender or title company’s email address to send “updated” payment instructions. These spoofed emails may look legitimate at first glance. Champion Title will NEVER send a change in wiring instructions by email or fax. If you receive such a request from any entity, ALWAYS confirm over the phone by calling a phone number previously on record or from the entity’s website.
Use secure portals for communication. Many attorneys, banks, title and settlement agencies have secure communication portals they use to communicate sensitive information. These portals require a special log in and password that only the recipient knows to gain access to messages. Make sure you verify the invitation to the portal via telephone, again using a phone number not within the emailed invitation itself.
Confirm receipt of wires. Once you’ve confirmed wire instructions, make sure you follow up with the recipient of the wired funds after it has been sent. If there is an issue and it’s caught early, chances are higher you might be able to recover the stolen funds.
Establish a list of parties to the transaction with phone numbers at the beginning of the process. As outlined above, possessing legitimate phone numbers of the various players involved in the real estate transaction is key to protecting against wire fraud. Make sure you have this list handy from the start so you can verify email messages quickly and with confidence.
Send a check if you are unable to verify wiring instructions. Although overnighting a check is a bit slower and more expensive than processing a wire, that inconvenience is minor in comparison to your funds being stolen.
Update your insurance coverage. If you are an entity that wires funds on a day to day basis, double check with your insurance provider to see if you can add insurance to cover losses incurred from wire fraud.
With Champion Title as your partner, and by exercising an abundance of caution with the above guidelines, you can significantly increase your chances of remaining victim-free from real estate wire fraud. For more information or any questions, please call us at (703) 444-4100, or visit our website at www.championtitle.com.