In a small town in Montana, Flying S Title & Escrow of Montana recently faced a wave of fraud attempts targeting vacant land properties. Over the course of just one month, the company successfully identified and stopped three fraudulent transactions. The team’s vigilance and strict protocol using Closinglock were crucial in preventing these scams, protecting both the sellers and the buyers from huge financial losses.
Fraud attempt #1: A suspicious seller raises red flags
The first incident occurred when a buyer was preparing to purchase a vacant land property by securing a loan against their residence. Flying S required the seller to use a vetted notary through a certified signing service as part of its established protocol. However, the supposed seller refused, citing health challenges and insisting on using their own notary.
This unusual behavior raised suspicions.
The escrow officer escalated the issue to Megan Clapp, Escrow Compliance Officer, who conducted a reverse search on the seller’s name and found multiple names and addresses. Early the following day, they managed to contact the actual property owner, who confirmed that he was not selling the land.
“The real seller told us that his son lived next door to the property and would have known if it was up for sale,” said Sarah Bennett, Manager at Flying S. Oftentimes, fraudulent sellers, like in this case, ask the real estate agent not to put a for-sale sign at the property for fear of alerting the actual owners.
Bennett then asked the fraudulent seller to complete an identity verification via Closinglock, which he refused to do. Many title companies, like Flying S, leverage technology for ID verification since AI is making fake ID generation easy, effective, and almost undetectable to the human eye. Closinglock verifies against non-public data sources that are not so easily accessed by bad actors.
In this case, the fraudster took a chance by sending a fake ID via a text message, hoping that it would pass due to human error. The ID had the correct name and address, but upon closer inspection, the photo had been cut and pasted.
The Flying S team knew the red flags to look for and immediately halted the transaction, preventing a fraudulent sale.
“Without Closinglock’s IDV tool, we might have missed critical signs of fraud,” Bennett noted.
Fraud Attempt #2: Recognizing a familiar name
Just a month later, the company encountered another fraud attempt that was stopped because a member of the team recognized the name of the seller, a man she’d met only a few weeks prior in a separate fraud attempt on the same piece of property.
“The true seller had visited our office two weeks prior to thank us for catching the first fraud attempt,” Bennett explained. When the new order came in, they immediately knew it was another scam. They contacted the realtor and stopped the transaction before it could proceed.
Fraud Attempt #3: Two properties, one phone number
Later that same day, a third fraud attempt surfaced. This time, a different realtor contacted the title company with a listing packet for a separate property. The fraudster used the same phone number as in the previous cases, raising immediate red flags.
“It was unbelievable!” Bennett said. “The same fraudster tried to initiate two different fraudulent sales in a single day with two different Realtors.”
Thanks to their diligent processes and trained staff, the Flying S team caught the attempt before any harm could be done. But the story highlights that fraudsters will stop at nothing, including being caught only a few hours prior, to commit fraud.
Key takeaways: The importance of processes and technology
Flying S credits its success in thwarting these fraud attempts to a combination of vigilant staff and robust processes, including the use of Closinglock’s secure platform. “Anytime we deal with vacant land, properties without loans, or seller’s that will not be attending closing within our office, we require sellers to use a vetted notary from a certified signing service,” Bennett explained.
In addition to requiring certified signers, the company also uses Closinglock’s platform to verify identities and bank account information, and securely exchange sensitive data and funds with clients.
“We use Closinglock anytime wire instructions are sent out,” Bennett emphasized. “There are no exceptions. It’s our company policy, and it has proven to be a vital part of our fraud prevention strategy.”
Raising awareness to protect communities
After successfully preventing multiple fraud attempts, the title company took additional steps to raise awareness in their community. They contacted the county attorney and the county clerk to discuss ways to flag properties at high risk for fraud.
“We want to make sure everyone—buyers, sellers, Realtors—is aware of these scams and knows how to spot the warning signs,” Bennett said. “You have to stay alert. Fraudsters are becoming more sophisticated, but with the right processes and tools, we can stay one step ahead.”
To learn how Closinglock can streamline operations, improve efficiencies, and protect your business and clients from fraud, request a demo with a member of our team.
About Closinglock
Closinglock is a fraud-prevention software revolutionizing the transfer of funds and information in the real estate industry. Title companies can send wire instructions, securely exchange documents for e-signing, and receive payments from one secure platform.