Wire Fraud – Is It Still a Thing?

By Karen Burnett, Senior Vice President, Escrow Manager

Yes, it is!  Stealing has been part of human history since the beginning of time and as we have evolved, so have thieves and their ruthless ways of parting people with their money.  In the Real Estate Industry, thieves continue to target wire transfers to try to divert money into accounts they control, leaving every piece of the transaction shattered.  It is devastating!  Almost always, proceeds from a property sale or a down payment for a home purchase represent a lifetime of savings for people, leaving families scrambling to pick up the pieces.  Sellers are prevented from purchasing their next property, and buyers cannot complete buying their dream home.  There is no good outcome!

Here at Independence Title, we continually work to improve our customer education about wire fraud by providing educational material to our teams and customers about the red flags that often accompany a wire fraud event.  We talk about it a lot and constantly revisit our processes to try to stay ahead of the thieves.  In most cases, thieves intrude into someone’s email account and assign rules to incoming and outgoing email traffic once inside, essentially taking control of the conversation and steering it however they wish it to go.  The email ‘looks’ like it is coming from the correct person, but the thieves mask their email address to make themselves look like the person sending or receiving the email.  Upon close inspection, you can see that the email is actually going elsewhere.  Another common practice is that thieves will remove or delete emails from someone’s inbox or sent box before the person ever realizes it, making them unaware that any email activity is occurring.  A thief can have multiple email exchanges before the account owner realizes it.

The most common repeat characteristics we see in wire fraud attempts are as follows:

  1. Emails or texts which urgently request that funds be wired.
  2. Emails or texts which are poorly worded or phrased.
  3. Emails or texts are offered as the only means of contact, aka being unable to talk on the phone.
  4. Wiring instructions where the receiving bank is located outside of Texas.
  5. Wiring instructions where the account name is not under Independence Title.

In our efforts to fight it, we share the following with our customers at numerous points during a transaction:

  1. Cashier’s checks eliminate the risk of funds being stolen by wire fraud
  2. Always verbally confirm wiring instructions with an Independence Title team member, using a known, published phone number before sending funds via a wire transfer.
  3. Once wiring instructions have been provided and verbally confirmed, they will not change, so any subsequent instructions received should be disregarded.

In addition to the three steps above, we have partnered with a company that provides a secure portal for buyers/borrowers to download our wiring instructions and where sellers can securely upload their bank account information.  By leveraging industry-leading security practices and real-time identity verification, they can quickly identify scam email accounts and validate users using multi-factor authentication.  They protect over $5 Billion in wire transactions every month nationwide.  By adding them to our wire fraud prevention steps, we believe it will dramatically reduce the opportunity for fake wiring instructions to be substituted for authentic ones.

Reach out to your Escrow Team or Business Development rep for any questions and more information.