#1 Engage in Proactive Protections
It would be easy to summarize this suggestion as “trust, but verify,” but it goes much deeper than that. If all you’re doing is reviewing your work before the client sends their money, then you’re still just reacting to the situation. We recommend going the extra mile by working with your mortgage lender and title company. This ensures the following steps are in place before your client is assembling their finances.
We want to ensure you are proactive about the money transfer process. By watching for these red flags, you’re setting yourself up for success:
- Only send and receive emails from a secure location and server
- You should verify everything you see in that email with the title company before acting
- Compare and contrast the information in any email with established information the client has already received from the mortgage lender and title company
- Confirm and double-check the wire information specifically before doing anything
- Be very leery of anyone requesting a transfer to an international bank, instead of a domestic branch
#2 Watch for Hackers
Tip #1 is necessary for one reason: hackers. Real estate wire fraud has risen dramatically in the last few years. Wire fraud scams have increased by more than 1,000% since 2015. In 2018 alone, over $150 million was lost to hackers – and this was just in the U.S.
Most often, hackers target consumers in real estate transactions with the following tactics:
- Email: Free accounts and services are especially susceptible to being hacked.
- Go online to agent websites like HAR, etc.: Information about sellers, buyers, real estate agents, and title companies are more transparent than you realize.
- Send emails to agents & title companies to gain access and information: They make things seem legitimate by contacting all involved parties with similar, but slightly divergent information so everyone feels informed, but something is just a little bit off.
- Send emails to the consumer, based upon that email and information: Hackers collate everything they’ve learned about you and your real estate transaction to lure you into making a mistake.
They typically use email addresses that look just close enough to a real one to be convincing. Why? Hackers know the average person doesn’t read the fine print. A common occurrence is a single character of an email address being replaced with a look-alike that most people don’t catch – like using a “vv” instead of a “w.”
These amoral and technologically savvy people have found a market inefficiency to exploit. People are so excited to buy a new home that they don’t pay close enough attention to what’s happening. This is why you must be on the lookout for hackers at every possible stage of the wire transfer process. Any slip-up could result in your client losing all the money they saved to buy a home.
#3 Use Secure Systems
As the real estate agent, you can’t necessarily set up secure technology on your own terms. You should direct clients to mortgage lenders and title companies with cutting-edge services that keep information and money secure. Thus, you should be careful with the companies you use to help your clients buy a home. Specifically, your clients should only communicate through the secure portal provided by the lender or title company.
At Patten Title, we believe we’re in a sacred position. People trust us to help bring their dreams to life through this home buying process. No matter whom you are or the size of your real estate transaction, we deliver the following secure wire transfer protocols to prevent against wire fraud:
- All wire instructions go out through Qualia, our state-of-the-art secure customer platform. You can’t access any part of it without a custom login.
- We will never send out wire transfers without first receiving explicit confirmation and/or a signature from the consumer.
Trust is everything in the real estate and title industry. So, everything we do is built around securing and preserving it with each and every client
What Should I Do if I am a Victim of Wire Fraud?
Unfortunately, even the best and brightest among us can get hoodwinked. The folks engaging in wire fraud are extremely smart, and they cast a wide net. All they need is one person to slip up to reap a profit. In fact, most wire fraud scams are full-fledged operations working in locations around the world, with specific concentrations in Eastern Europe and the Middle East.
If wire frau iccurs during a real estate transaction, you should immediately call your local police department and the FBI to file a report. You should then call your bank to file fraud and stop the payment. Unfortunately, there are fewer protections for wire payments vs. ACH or credit card payments, but success stories of fund recovery do exist.
If you have any more questions about how you can protect your clients from real estate wire fraud during the home buying process, contact Patten Title Company today!