Real estate wire fraud is becoming increasingly common throughout the United States. Data from the Federal Trade Commission shows an 1100 percent increase in mortgage-related wire fraud from 2015 to 2017. Even savvy consumers fall prey to these scams, so it’s important for everyone involved in the property transfer process to be aware of the problem and the best ways to avoid it. Here’s what you need to know to help your customers avoid real estate wire transfer fraud.
Make Sure Your Title Company Uses ClosingLock
ClosingLock is the safest way for title companies to communicate with customers because it eliminates the opportunity for real estate wire fraud by locking wiring instructions in a secure portal rather than sending them via email. The homebuyers you work with will never have to wonder whether communications from your title company are legitimate because they’ll always know to expect them to be sent through ClosingLock.
Provide Education to Your Customers
While using ClosingLock is the best action you can take on your end to prevent wire fraud, it’s also important to educate your customers on what to expect from the closing process. Here are some important safety tips to pass along to your homebuyers:
Understand How the Closing Process Works
One of the ways in which scammers get homebuyers to wire them funds is by posing as real estate agents or closing company contacts and asking for closing costs to be wired ahead of schedule—with the wiring instructions going to the criminal’s bank account, not your title company. Make sure your customers understand what’s expected of them for closing and when each step takes place.
Have Multiple Ways to Contact Everyone Involved in Your Transaction
Criminals hack into email accounts or use spoofed accounts to pose as real estate agents, lenders, attorneys, and title company employees. Even phone numbers can be spoofed on caller IDs. If a homebuyer gets a phone call that doesn’t sound right, they should follow up with email addresses and phone numbers that have been previously verified, not given in the phone call or email. If it’s an email that sets off alarm bells, they should return it with a phone call to verify that it’s legitimate.
Don’t Fall for Last Minute Change Requests
Many real estate wire fraud scams take place in the days leading up to closing. Why does wire fraud in real estate happen so often at the last minute? It’s because criminals know that buyers are on edge and that the thought of their transaction not going through will cause them to panic—and when they panic, they’re not thinking clearly. No one involved in a legitimate real estate transaction will make any sudden changes that require the immediate transfer of funds before the closing date and your customers should be aware of this.
Don’t Accept Wiring Instructions Via Email, Phone, or Postal Mail
When your closing company uses ClosingLock, your customers will know that wiring instructions sent by any other means should be disregarded. They’ll also know not to share their own sensitive financial information over email or other unsecure methods. ClosingLock gives everyone in the process peace of mind and certainty—with real estate wire transfer fraud on the rise, that’s priceless.