As technology evolves, fraudsters are getting increasingly more sophisticated with their methods to steal funds, especially in high-stakes transactions like buying a home. The last thing anyone wants to worry about during this process is the threat of fraud. Business email compromise (BEC) and other wire fraud schemes are among the most prevalent threats. Documented by the recent FBI IC3 report as the second-costliest type of crime, BEC claimed $2.9 billion in reported losses last year.
Because so many of us rely on email to conduct business – both personal and professional – it’s more important than ever to remain vigilant about this risk. In the real estate field specifically, buyers, sellers, agents, attorneys, escrow officers, management and anyone else who handles accounts and payments are vulnerable. Here’s what you need to know and how to protect your business.
What is Business Email Compromise?
Business email compromise (BEC) is a cybercrime involving the impersonation of trusted parties. Victims are tricked into transferring funds or sensitive information via email. BEC typically involves the following steps:
- Initial Compromise: Hackers get access to accounts and data through phishing. With real estate transactions documented as public record, fraudsters can easily browse the internet for their next victim. They send emails that appear to be from known sources, prompting recipients to hand over important information. In many cases, subtle variations on actual email addresses (like adding an extra letter or hyphen) trick victims into thinking fake accounts are real.
- Monitoring and Planning: Once they have access, fraudsters monitor email activity to understand transaction patterns and identify key individuals.
- Execution: Fraudsters impersonate the compromised account holder, sending emails with legitimate requests. These emails often include instructions to change payment details or direct money to fraudulent accounts.
- Manipulation and Fraud: Fraudsters quickly move the stolen funds, making the transactions difficult to trace and recover.
Warning Signs of Business Email Compromise (BEC)
The high-value transactions inherent to the real estate industry make it especially vulnerable to fraud. By familiarizing yourself with the most common warning signs, you can help protect yourself and your business. Here are some examples of what to look for:
- Emails addresses with typos – Be cautious of email addresses that have slight misspellings or variations.
- Urgent or unexpected requests – Emails requesting urgent or unexpected fund transfers, especially to a new or unknown account, should raise an alarm.
- Unusual language or tone – If an email’s language or tone is inconsistent with what you’re familiar with, it may be worth investigating. You know the communication style of your colleagues better than anyone else!
- Inconsistent communication – Watch out for emails that stray from usual communication patterns, like requests from executives that urgently need information and skip normal procedures.
By staying vigilant, you can better safeguard your transactions and protect your business from fraud.
Fraud Protection from Closinglock
Closinglock’s mission is to protect life’s largest investment by revolutionizing the transfer of funds and information in the real estate industry. Through a secure, feature-rich technology platform, Closinglock is rendering BEC obsolete by keeping fraudsters locked out of the closing process.
In the platform, each feature is designed to work in conjunction to protect the transaction from start to finish. These features include sending and receiving wire instructions, verifying identities and payoffs, receiving Good Funds payments and more. With this peace of mind, settlement companies can focus on expanding their business and ensuring a seamless experience for all of their clients.
If you are worried about the threat of fraud, contact us today to learn more.