Wire fraud has been in the news a lot lately, but if you’re a little bit hazy on the details, you’re not alone. Most people have heard of wire fraud before, but fewer understand what it is and why it’s becoming increasingly common. Below, we answer some common questions asked about wire fraud and wire fraud prevention.
What exactly is wire fraud?
A common misconception is that wire fraud refers to wiring money, but it’s actually any type of fraud that takes place via telecommunications or the internet. Criminals conduct wire fraud over the phone, through emails, and even with apps and social media messaging systems. While the internet has certainly made wire fraud easier and more prevalent, it has existed for decades, albeit in different forms.
Wire fraud is a serious federal offense, but unfortunately, many of the criminals who perpetrate wire fraud are located overseas, which makes prosecution difficult, if not impossible.
What is the difference between mail fraud and wire fraud?
Many of the tactics used in mail fraud and wire fraud are the same, with the difference being that wire fraud relies upon telecommunications or the internet, while mail fraud is perpetrated through the United States Postal Service, FedEx, or UPS.
Who investigates wire fraud?
The FBI usually investigates wire fraud because it is a federal offense, but state laws and charges may also apply. Victims of wire fraud are encouraged to contact both the FBI and local law enforcement.
Why is real estate wire fraud increasing?
Real estate transactions are the perfect target for criminals because they involve a large amount of money, emotions are running high as closing dates near, and there are a number of parties involved. While most people these days would immediately hit delete on an email claiming to be from a Nigerian prince, very few would be able to easily identify a spoofed email that appears to be from their title company or real estate agent.
Why isn’t real estate wire fraud insured?
You’d think that there would be some kind of insurance solution to protect homebuyers, but real estate wire fraud is a gray area when it comes to insurance. Cybersecurity insurance typically only covers hacks, but wire fraud rarely involves hacking—instead, criminals deceive homebuyers into voluntarily sharing their financial information or wiring payments to them. This type of crime isn’t covered by cybersecurity insurance or any other insurance policy that title companies might have.
Because there is no insurance policy to protect against this type of real estate wire fraud, prevention is key.
How do you avoid wire fraud in real estate?
ClosingLock makes it easy to secure the real estate transaction process and prevent wire fraud. Our simple, affordable solution protects title companies and their customers from a wide range of vulnerabilities, including social engineering, email spoofing, clone phishing, email hacking, imposter fraud, and compromised accounts.
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