What Is Wire Fraud, and What Do Firms Need to Know to Stay Safe?

What Is Wire Fraud, and What Do Firms Need to Know to Stay Safe?

Written by:

Tom Cronkright

Read time:

4 minutes

Category:

Wire Fraud

Date:

Feb 23, 2022

Buying or selling a home is a major transaction for many consumers, one that they may make only a few times in their lives.

That’s why individuals turn toward professionals in the real estate business to help guide them through the process, protect their interests, and facilitate a smooth transaction from start to finish.

Unfortunately, with digital platforms such as email and web applications playing an increasing role in the closing process, real estate wire fraud has quickly become a growing threat to real estate transactions. And, when it strikes, these forms of fraud not only shatter people’s dreams for a new home but also shake the confidence of all those involved.

So, just what is wire fraud, and what steps can you take to keep your business and your customers safe?

What is wire fraud?

Like other forms of fraud, real estate wire fraud takes advantage of people’s trust in the digital platforms that they use, their habits, and their tendency to follow habits.

One prime example of how criminals inject themselves into the closing process is through phishing or business email compromise. In these cases, criminals either spoof the email address or obtain the credentials of a legitimate party’s email account and then redirect email correspondence. They then capture the legitimate wire transfer data collection and confirmation process and replace the real destination bank account information with their own.

After being transferred into the criminal’s bank account at closing, the money is then quickly transferred to other accounts in an attempt to prevent traceability and funds from being recovered.

What are some recent trends in real estate wire fraud?

While you may not hear about real estate wire fraud as much as other forms of cybercrime, such as ransomware or data breaches, this form of fraud is rapidly growing.

In fact, according to an FBI report, real estate/rental fraud led to more than $213 million in losses in 2020, and one-third of all wire transactions involved at least one attempted fraud. Similarly, in 2020, 76 percent of title agents noticed the occurrence of attempted wire fraud either maintained its upward trajectory or stayed the same from the previous year.

This is likely because these criminals are successful in transferring money out of the grasp of recovery more than 70 percent of the time once money has been fraudulently sent to their bank accounts. 

How can you protect your customers from wire fraud?

Fortunately, like most criminals, a dose of deterrence and security awareness is often enough to prevent your transactions from becoming another statistic.

Here are some of the key ways you can help keep your business and your customers safe from wire fraud:

  • Educate your customers and employees on the warning signs of phishing and business email compromise, such as unusual changes in the content or behavior of correspondence.
  • Implement basic cybersecurity hygiene, such as strong password policies that prevent password reuse and increase the length and frequency of changes.
  • Ensure that software used in facilitating the closing process is updated, patched, and, if necessary, protected by a firewall that prevents unauthorized access.
  • Utilize a platform that not only facilitates the secure and authenticated collection of bank account wiring details but also offers customizable and guaranteed protection.

Put a stop to real estate wire fraud.

Just the thought of wire fraud affecting one of your customers is enough to feel overwhelmed. 

Fortunately, by maintaining vigilance, knowing the warning signs of fraud attempts, and protecting your transactions with an industry-leading platform such as CertifID, your team can do its part to prevent your clients from becoming another statistic.

Want to learn even more about how to protect your business from tomorrow’s cyberthreats? Then make sure to download our free resource, Cybersecurity Measures You Can Implement To Protect Your Real Estate Business.

Tom Cronkright

Co-founder & Executive Chairman

Tom is an accomplished entrepreneur and licensed attorney. He has founded and led award-winning businesses to receive honorable recognition in their respective fields. Tom is also a highly sought-after speaker who lends his expertise to the world of real estate, fraud, and security-related topics across the country.

Getting started with CertifID is easy.

Request a Demo