These days, just about everybody working in the real estate industry knows that wire fraud is a serious problem. Despite this, it’s easy to underestimate how massive this issue has become. According to the FBI, an estimated 13,638 individuals fell victim to real estate wire fraud in 2020–a number 17% higher than 2019.
So, how do you protect your clients from wire fraud? The answer is surprisingly simple–be proactive. Read on for effective, proactive strategies to prevent real estate wire fraud.
Remember, your clients likely haven’t experienced wire fraud as most people don’t buy homes often. It’s best to assume that your new clients don’t know why they need to be on guard during real estate transactions.
Consider providing them with stats, facts, and the stories of victims of wire fraud.
- In 2020 wire fraud was attempted in one-third of all real estate transactions. That means there is a 30% chance that a fraudster will attempt to steal your money during the process.
- People are losing money to scammers from wire fraud every day–including the Fisher family who lost their dream home and nearly $1 million.
- The average victim loses an average of $100k.
- The names and numbers within the email scam are often accurate.
Above all else, make sure they understand to always be suspicious of any correspondence dealing with finances.
Streamline Your Processes
Another great way to keep your clients safe from wire fraud is to give them a totally clear explanation of what to expect at every stage of their transaction. To make this possible, you’ll need to have a fixed process in place that stays the same for every customer.
Remember These Tips
Having a reliable, simplified process also makes it easier to shut out con artists. In the modern age, scammers can create email messages that are nearly indistinguishable from the real thing. That’s why your process should make clear your methods for communication. In addition, it should include verification steps clients can follow if they receive messages that look convincing but don’t follow your established process.
The process that’s right for your company might not look exactly like another business’ approach to wire fraud prevention. However, there are a few tips that are always good to keep in mind:
- As explained above, let your clients know about the risk of wire fraud as early as possible when closing a sale. The sooner they understand this threat, the lower their risk of getting conned will be.
- Implement a ban on making changes to disbursements based on emailed instructions.
- If you find yourself in a situation where you absolutely must communicate via email for whatever reason, do not use “standard” email messages. Choose encrypted email instead.
- Tell clients that if they receive an email message asking them to wire funds, they need to follow up with a phone call from a phone number they obtained from a verified source such as a company website.
- Make sure your customers understand the concept of email spoofing (the use of forged email addresses by scammers).
- Encourage your clients to be wary of seemingly urgent requests for payment, even if they appear to come from an official source.
By implementing these strategies and other common-sense fraud prevention techniques, you can significantly reduce the likelihood that your clients will become victims of wire fraud.
Take a Proactive Approach
Many real estate firms turn to fraud prevention software as an added safeguard. The key is to make the process easier for clients rather than more complex. Unfortunately, many solutions require things like registration procedures and app downloads that take time and can be frustrating.
In the interest of simplicity and improving the user experience, it’s smart to find real estate security software that can do its job effectively without added friction for your customers.
ClosingLock is the answer.
ClosingLock’s software solution provides real-time verification of routing and account numbers and will alert you if it finds any signs of suspicious activity. Meanwhile, your clients won’t have to jump through hoops–they won’t even have to use a password. ClosingLock has kept $50 billion in real estate transactions safe.
Find out how they can help your business and clients today!