It’s every home buyer’s nightmare. James and Candace Butcher wanted a new home, a bigger place that was closer to their children and grandchildren. After selling their home, they planned to use the proceeds – nearly $300,000 – to make a downpayment on a new place in the suburbs of Denver, CO. But fraudulent wire fraud instructions sent their life savings into the hands of scammers. Now the couple is suing the bank, the title company and the real estate firm for their shoddy security practices.
It’s a scam so common that one of the companies being sued – Land Title Guarantee Co. – has issued public advisories, listing best practices on how to avoid wire fraud in real estate transactions.
“Sensitive financial information should never be sent over unsecure email,” wrote the company in a 2016 advisory, “Clients should be made aware to never wire funds without first calling the intended recipient by telephone to confirm the information provided.”
But neither of those practices were followed in this situation, alleges the Butcher’s lawyer Ian Hicks. He says sensitive information was sent through email throughout the transaction.
So the Butchers thought nothing of it when their realtor said wire instructions would be coming via email from the title company the next day. When that email came, with the final amount and wiring instructions, the couple followed them, not knowing they were sending their hard-earned cash into the hands of thieves. The email contained the exact amount of the transaction – $272,535.96 – which was likely obtained by hacking or intercepted by the scammers via email.
A call from Wells Fargo the next day indicated a problem with the transaction, but the couple couldn’t get answers from the bank and was never informed that the FBI could initiate its “Financial Fraud Kill Chain” if they were notified within in the crucial first 72 hours. The Butchers and their lawyer allege that none of the companies did enough to protect their sensitive financial information and violated their own guidelines on security measures.
Wire fraud schemes like these have already stolen millions from businesses and purchasers across the nation, and they’re not letting up. These companies aren’t only losing money – they’re now dealing with the bad publicity of losing their customers’ cash. When your job is handling financial information and large sums of money, it doesn’t help when your business name turns up articles about wire fraud in a google search.
This case clearly demonstrates that you can be aware fraud is a risk, have policies and procedures in place to prevent it, and still end up putting your clients and your business at risk. How can you be sure that every single one of your employees and all of your partners are practicing perfect security measures at every moment during each and every transaction? You can’t. And that’s why our founders created CertifID.
You need to be certain that every transaction is secure, but a list of tips and best practices will only get you so far. CertifID can give you the peace of mind that your security measures haven’t been outsmarted by a resourceful scammer. Know that everyone is who they say they are and that the money you’re tasked with handling ends up in the right place – every client, every transaction, every time.