Wire transfers happen every day in real estate – and most involve large sums of money. It should be no surprise that this industry has caught the eye of hackers and scammers around the globe. They successfully make a living by stealing closing costs through wire transfer fraud in so many different ways.
Using emails that look similar to a real estate agent, title agent, or lender
Spoofing the number of an agent or lender when making calls
Creating a website that looks legitimate – and familiar to an agent or lender
This is all done with the purpose of getting your funds into the scammer’s account. They phish for information and, when the time is right, they will let you know that there was a last-minute account change or say that they sent you the wrong wire information the first time.
And just like that… your closing costs are gone. Wire transfers cannot be reversed.
In any real estate transaction, the risk is going to be there. The only way to safeguard yourself for sure is to know ways to prevent wire transfer fraud.
Here are 6 that you can begin implementing right away.
1. Understand the Risks
You can’t prevent something from happening or protect yourself from it if you don’t know what it is or understand how it works. Even knowing there is someone out there that could try to steal your closing costs may not allow you to understand how they are doing so.
Take some time to educate yourself as well as those around you about the risks, the scams, and what to look out for.
2. Personally Verify Each Wire Transfer
It is common for scammers to send a real-looking email with contact information and a note about the wire transfer. You call the number on that email to verify the wire instructions – and you’re going to wish you hadn’t.
One of the best ways to protect yourself from wire transfer fraud is to verify each wire transfer before sending funds. Do not call numbers in emails or on websites to verify. Rather, use the information you received at the beginning of the transaction – numbers you have previously used before talking money.
Speak to the person and verify the request. You can even implement a two-step verification process just to confirm the identity of the individual you are speaking with.
3. Never Send Wire Instructions via Email
You never want to send wire instructions via email. This is one way to avoid any confusion altogether. If this is your policy, then it doesn’t matter if a scammer tries sending new wire instructions – you would disregard it because you know that it is policy to not discuss wire instructions via email.
Stick to fax, phone, or regular mail instead.
4. Involve More Than One Person
It can be a great idea to involve more than one person in wire transfer transactions. Consider it another pair of eyes or checks and balances in a sense. By segregating the duties around wire transfers, you can feel more confident and safeguarded from fraud. For instance, do not allow the same person who receives the wire transfer request, to send it.
5. Use Encrypted Email
Encrypted email cannot be intercepted by outside parties. Once it is sent, it is converted from a readable email into one in which the text is scrambled and unable to be deciphered. Only the recipient that the email is intended for will be able to view it.
Any confidential email – or any email at all – from a title company, real estate agent, or lender that discusses any aspect of a real estate transaction should be encrypted to reduce risk.
6. Invest in Wire Transfer Fraud Software
When you invest in wire transfer fraud software, you are automatically giving your company and customers the protection needed for a safe, secure transaction. You will work through a secure portal with multi-factor authentication, as well as wire fraud warnings to keep everyone educated and alert throughout the process.
These simple software programs can be integrated into your current system and provide you with the security you’ve been looking for.
Prevent Wire Transfer Fraud with Closinglock
While we can’t stop hackers from trying to engage in wire transfer fraud, we can make their tries unsuccessful. By choosing software by Closinglock, you can keep confidential information out of the wrong hands.
For wire fraud protection, encryption, password protection, and more – contact us today to see how we can protect you and your clients.