Title Agencies and Wire Transfer Fraud

Walking clients through a real estate closing is a delicate dance in which trust, professionalism, and diligence are keys to a successful experience.

Unfortunately, given the amount of money involved in real estate closings and mortgage payoffs, criminals are increasingly targeting these transactions in hopes of barging their way into the party in return for a big pay day.

That’s why it is more important than ever to understand the ins and outs of how wire fraud happens, the risks to your business and your customers, and how title agencies can mitigate those risks.

Ready to tackle each of these elements? Let’s dive in!

Wire Transfer Fraud 101: What Title Agencies and Settlement Companies Need to Know

Despite increases in cybersecurity awareness, cybercriminals have not only continued to threaten real estate transactions across the country; they’ve also stepped up their game. 

According to a recent ALTA survey, 86 percent of title and settlement companies noted an increase or continuation of the threats to their business from wire fraud over the previous year. Of those companies that became victims of fraud, only 17 percent fully recovered the stolen funds. 

However these criminals choose to commit fraud—from gaining unauthorized access to email accounts to spoofing legitimate-looking websites and a range of techniques in between—the goal is the same: to alter real wire transfer instructions to redirect wired funds to their accounts instead of the bank holding the loan or the seller. The financial impact of wire transfer fraud on agencies and their clients has been devastating: Financial losses from all forms of fraud reached $3.3 billion in 2020, an increase from $1.8 billion in 2019. Title and settlement companies that want to avoid becoming part of these statistics should take a hard look at their existing fraud protection.

Traditional Methods of Security Are No Longer Enough

In today’s digital economy—where emails, text messages, and video calls are used for the full range of personal and professional business—it is getting increasingly harder for title and settlement companies to find the right balance between convenience and security.

In other words, while these digital tools have made the closing process easier and less paper-driven, these changes have also opened up new risks that need to be mitigated with stronger security measures.

Here are a few of the most common digital tools used to facilitate closings and the threats your team needs to know about:

• Fax machines: Even with the rise of online-enabled fax services, there are risks related to not being able to verify who is at the other end of the line or to confirm that every link along the communication chain is secure enough to protect sensitive information.
• Online portals: Though online portals are great for uploading, storing, and viewing documents, it is common for criminals to fake web portals that match legitimate lenders or mortgage companies and trick victims into sharing sensitive data in the wrong place.
• Unsecure email: Criminals are increasingly pursuing business email compromise (BEC) to interrupt and intercept the legitimate sharing of wire transfer data, modifying communications or directing messages to unauthorized recipients. 

In each of these instances, cybercriminals are taking advantage of the difficulty of confidently verifying that the party on the other end of the line is who they say they are. 

In today’s cyberthreat environment, a hope and a prayer is no longer enough. Your transaction could be next.

Protect Against Wire Fraud with CertifID

Cybercriminals don’t care who you are or where you’re from; they are just on the hunt for a big pay day, and your wire transfer process may be ripe for the picking.

That’s why you can’t just be an “average” settlement and title company anymore and hope that your business doesn’t become another statistic.

Instead, your business can use CertifID to mitigate the risk to you and your clients with a platform that delivers end-to-end encryption and independent identity verification to secure the key elements of the wire transfer data collection process. CertifID is an industry leader in helping businesses like yours fight back against cybercriminals, offering each transaction the peace of mind that comes with up to $1 million in insured protection and the backing of a professional, in-house recovery services. 

Want to learn even more about how to protect your business and your clients from the dangers of wire fraud? Let’s schedule some time to demonstrate what CertifID can do for you. 

And, check out our new Mortgage Payoff Fraud Prevention Checklist, to address your highest source of potential risk right away.