Escrow Scams: What Every Title Company Should Know

E-commerce continues to gain popularity in the real estate industry and elsewhere. As a result, it’s more important than ever to make sure your title company has a plan in place to deal with escrow scams. These scams, which involve fraudsters posing as trustworthy escrow services during real estate deals and other transactions, have exploded in recent years due to the COVID-19 pandemic and related factors. 

While escrow scams and other types of fraud are now commonplace in the world of real estate, there are ways to lower your risk of getting caught up in these cons. To protect your business and clients, here’s what you need to know.

Wire Fraud Continues to Trend Upward

Advances in how people and companies do business online have allowed for unmatched levels of efficiency and convenience. With that said, they have also created new opportunities for con artists to cheat companies and individuals out of their money–including online escrow scams.

No industry is immune to the rise of digital wire fraud. However, the world of real estate is particularly vulnerable due to the large sums of money involved with home purchases and the industry’s increased focus on online business in the wake of the pandemic. According to the FBI, real estate scams increased by an estimated 1,000% between 2015 and 2020, with about $150 million lost in 2018 alone. 

Real estate scams will likely continue to increase. That’s why it’s time to take common-sense steps that can enhance your title company’s digital security.

Fintech Provides Security

One of today’s most prominent trends in real estate is an increased reliance on financial technology, or “fintech.” Even before the pandemic, the adoption of fintech by real estate companies was on the rise, as high housing prices at the time put pressure on clients to buy homes quickly. Familiarity with e-commerce among millennials has also helped drive fintech’s growing popularity in the real estate business. And since it can help businesses and homebuyers save time while doing business in person or at home, fintech isn’t going away anytime soon.

With that said, perhaps the most crucial benefit fintech offers to the real estate industry is its ability to protect transactions from escrow scams and other types of online fraud. Technological security has long been a concern for title companies. Fortunately, fintech services like ClosingLock provide secure platforms where everyone involved in a transaction can safely communicate, send documents, transmit wire info, and verify payoffs.

Utilizing the Right Software Matters

Since fintech is a booming industry, your title company has countless options to choose from right now. Many organizations in the field boast about their software’s ability to streamline your office’s workflow while keeping you safe from scammers. To make sure you’re getting the software that’s right for you, you’ll need to take a close look at what’s available today.

When choosing real estate closing software for attorneys, be sure to look for programs that can deliver:

  • Meaningful security upgrades. You and your clients can’t afford to become the victims of a wire fraud scam. To minimize your risk of this happening, focus on finding fintech with payoff verification and wire info transmission services.
  • Safe digital communication. Email is a cornerstone of many escrow scams, so you shouldn’t rely on this remote communication method when closing a real estate deal. Reputable fintech programs can help you safely get in touch with other people involved with a sale, share documents, and even handle notarizations.
  • Ease of use. While security is crucial for fintech, your software shouldn’t complicate your workflow. Well-designed fintech programs can fit seamlessly into your current processes as they simplify tasks like title and escrow orders.
  • A high level of flexibility. Your real estate business isn’t the only one looking for fintech software. With that in mind, whatever program you select should work well with the solutions your partners use.

 

The Ultimate Protection

For payoff verification, safely wiring information, documents, e-signing, and much more, ClosingLock’s industry-leading financial technology software can protect both your business and your clients at every step of the sale process.

Unlike other fintech systems, your clients won’t need to register for an account or download an app. It’s an easy-to-use software built to thwart real-estate fraud (escrow scams included). To benefit from the enhanced security, contact ClosingLock today. 

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