How to Respond to a Wire Fraud Attempt

Wire fraud - it’s an epidemic in the mortgage industry. If it’s happened or is happening to you, you probably remember the awful first moment when you realized that thousands or even millions of dollars had been sent into the hands of criminals.

Realizing you’re a victim of wire fraud is terrible, but there are things that you can do to report the crime and, hopefully, recover the money. But every moment matters, so don’t delay. Here’s what you need to do to respond to a real estate wire fraud attempt:

Step 1: Contact your bank and have a fraud alert sent to the bank that received your wire.

When you speak to your bank, you’ll want to give them all the information you have on the wire transfer, including any reference numbers from the Federal Reserve. Prompt them to contact the fraud department of the receiving bank and place a freeze on the account. Demand that they tell you whether your funds are still in that account or where they were transferred. If your money was transferred to a third account, repeat this process with the subsequent bank.

Step 2: File a complaint with the FBI’s Internet Crime Complaint Center (IC3).

Notify the FBI of the crime via the IC3’s online complaint referral form. Keep track of your IC3 Complaint Number – you will need to give that to the FBI field office in the next step.

Step 3: Contact your local FBI field office and provide the IC3 complaint number.

Look up your local FBI field office and ask for the agent who handles financial or cyber crimes. Give that agent the IC3 complaint number, explain the facts leading up to the wire transfer and share any other critical information, along with your contact information so they can follow up with you.

Step 4: Contact all banks that may have also received your funds.

In step 1, you asked your bank representative to contact the banks that received stolen funds. Now, you’ll repeat that step yourself, asking them to freeze the accounts that received funds and if funds have been already transferred out since your funds were deposited. If funds have already been transferred out, find out where and repeat this step with subsequent banks.

If you carry E&O, professional liability, or cyber security policies, now is a good time to alert your insurance carrier.

Step 5: Contact local law enforcement.

Call the local authorities and file a police report. Provide them with all the relevant information and save the incident or police report number, along with sharing your contact information.

Step 6: Contact your security team, IT department or consultant to find out the source and extent of the breach.

If wire fraud happened to you, it means someone in your company or your associates has been compromised. The source of that compromise, and the extent of the breach, are still unknown. Reach out to your security professionals to initiate an incident response process. Don’t change any settings or system configurations before contacting your security team. If you don’t already have an incident response process in place, here’s an overview of what needs to be done:

• Determine the source of the breach. Most wire fraud attacks result from email compromise. An attacker has gained access to your email system through some means (phishing email, social engineering, or brute force). In more serious cases, the attacker may have installed malware on your machine and/or network that has not only compromised your email credentials but your credentials to other key company and personal systems.
• Ask your security team to create a “full image” of the system for forensic purposes. This is like asking for crime scene photos - documentation of exactly how things were at the point of the crime so it can be used to figure out what happened and when.
• If possible, use a clean loaner system. Conduct business using a different temporary email address so that fraudsters cannot continue to prey on you.
• If necessary, contact experts in eForensics. They can help you determine the source of the fraud if you haven’t already.

For a more detailed plan on how to respond to wire fraud, including a list of FBI field offices and legal documents you can use to recover your lost funds, download our complete white paper here.

What You Can Expect in Response to a Wire Fraud

While you probably are hoping to have your money back right away, it’s unlikely to work that quickly. If everyone is engaged in the recovery effort, you should have a good understanding of where your money is and the likelihood of recovery. You must keep the pressure on until you get answers to those questions. The actual return of your funds may take significant time depending on the institution and circumstances.

Be prepared to pay the bank for returning the funds

Most banks will require you to sign an indemnity agreement before they will return funds to you, saying that you’ll pay for the costs of them returning the money to you. Have a lawyer standing by to review and return the indemnity agreement. The indemnity agreement will come from the bank returning the money, not the bank you used to send the money in the first place.

Don’t trust anyone proactively reaching out to you about your fraud.

Cyber criminals know when money is sent. One of their tactics, to create more time to move the money overseas, is to call or email the person being defrauded and pose as a bank or FBI representative working to recover the funds. If you receive a call from someone identifying herself as being with a bank, the FBI or any other entity she claims is aware of your circumstances and working toward your recovery – DO NOT TRUST THAT CLAIM. Verify and double-check the authenticity of her identity.

Make Sure There’s Not a Next Time

Because with wire-fraud, it’s not a matter of if, but when. You need a plan in place to respond to fraud, but also to prevent it. Not sure how you can keep sticky fingers off your money in the future? We felt the same way. We created CertifID so you can know that everyone in a transaction is who they say they are, every single time.

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