It seems we cannot go a week without hearing about a major data breach, ransomware event, or system vulnerability that compromises the security and privacy of unsuspecting victims.

Although the techniques and the scale of the impact can vary widely, the common theme in these attacks is the opportunity for a cybercriminal to make a profit.

Unfortunately, even one of the biggest transactions of your life—the sale or purchase of a home, in which wiring funds is a common technique—is in the crosshairs of some fraudsters. In fact, according to a study from the American Land Title Association (ALTA), 76 percent of title agents reported that wire fraud attempts have maintained their pace or increased in the last two years.

So what do these alarming trends mean for you and your potential real estate transaction, and does it make sense to ask, “Are wire transfers safe?”

How are wire transfers conducted?

Commonly used to transfer large amounts of money, wire transfers are often handled bank-to-bank. In the case of a home sale, this could involve an escrow account dispersing money between buyers and sellers.

However, to facilitate the electronic transfer of funds, the closing and title service must accurately document the personal and financial information of both parties. This information includes bank account numbers and transfer amounts. 

The widespread use of wire transfers is a massive improvement over the security issues, lengthy processing, and rampant fraud when home closings were handled with checks. In the past, it could take days or weeks for a bank to determine if funds were insufficient to finalize the transaction, by which time the seller could have already transferred funds or conducted other transactions.

Instead, with the wire transfer process and automatic checks, banks and parties to the transactions can identify if fraud is occurring much more quickly.

What are some recent trends in wire transfer security?

The pandemic increased digital and remote transactions, which also increased the frequency of wire fraud, according to the Federal Trade Commission. In fact, nearly one-third of all 2020 wire fraud transactions were fraught with scam attempts.

This continues the growing trend of real estate and title firms being targeted by cybercriminals. Unfortunately, according to the same ALTA study, nearly 71 percent of the stolen funds were not fully recovered.

What can you do to increase the security of your wire transfer?

Fraudsters’ techniques have evolved, but so have the tools and techniques available for consumers and their agents to protect themselves. 

Some recommended actions include:

• Taking the time to investigate how your closing and title firm collects, handles, and facilitates the wire transfer process to confirm that it matches industry standards and includes modern security practices.
• Educating yourself about what to look for to identify potential fraud attempts, including requesting additional guidance from the team facilitating your wire transfer about confirming legitimacy.
• Utilizing a closing and title services firm that leverages industry-leading wire fraud protection technology and guarantees security.

Bring it all together.

Although the rise of digital platforms and electronic transactions has made many aspects of our lives easier, recent cybercrimes point to the need for increased vigilance and security measures to keep our transactions safe. Perhaps nowhere else is this as important as real estate transactions, in which there are large amounts of money and big pay-offs for those looking to take advantage of the process.

However, with the right tools and an awareness of the potential threats, the risks to wire transfers can be significantly minimized, making these transactions a quick and convenient option.

Are you tired of wondering, “Are wire transfers safe?” Then now is the time to reach out to the team at CertifID.

Our team welcomes the chance to get to know you and show you just how easy it is to take advantage of the end-to-end security built into the CertifID platform.
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