Wire fraud continues to be a top concern for the real estate industry. That sentence won’t surprise you – unless you’ve been living under a very large rock the last couple of years. Technology that has helped streamline and simplify the transaction process has been great. Unfortunately, technology has also aided the rise of criminals who are getting smarter and more sophisticated when It comes to wire transfer fraud originating on the internet.
Scams have always been around in our industry, but now most crime starts on a computer that’s miles away from its target. Business Email Compromise (BEC)/Email Account Compromise (EAC) scams accounted for more than $675 million lost in 2017, according to the FBI. Fraud is especially devastating for real estate transactions simply because of the sheer amount of money involved.
Placer Title Company has taken lots of steps to protect ourselves and our customers. After all, we’re the experts you can trust. It’s part of our caring mission. But all that could be for naught if we aren’t reminding our customers to stay vigilant and aware of new and evolving fraud attempts. We don’t want you to become the next victim.
ALTA unveils new ‘Rapid Response’ Plan for fraud
The American Land Title Association has done education and awareness campaigns about fraud and what you can do to protect yourself. There are several videos on the subject on ALTA’s YouTube page that you can share on your social media channels and with your team.
ALTA’s latest act was launching a 10-step Rapid Response Plan this summer that they want title companies and closing agents to follow if they are hit by suspected scammers. The plan, put together by the association’s Information Security Committee, advises companies to have discussions early about who on the team needs to be contacted and how to communicate to your customers if such an incident occurs. In cases of fraud, “time is of the essence and every minute and second counts.”
We think the plan is solid and Placer Title thanks the committee for putting it together. Many of the steps are self-explanatory, however, there are few steps that we want to highlight.
- Step 1: Alert management and your fraud response team. To us, the first step of this plan should read, “Make a plan.” We have one and hope you do too.
- Step 6: After a suspected fraud, agencies should review their response plan, practices and security measures to determine what needs to be strengthened to prevent future hacks and breeches of security. Just because you’ve just been hit doesn’t mean criminals are going to stop targeting you in the future.
- Step 8: If the funds were wired to another country, consider hiring an attorney who practices there to work on your behalf. Lots of these hackers are not in the U.S., which is why prosecution is so hard. (In fact, the FBI says that if the wire fraud attempt isn’t reported within 24 hours, the money is likely gone.)
- Step 10: In addition to reporting the crime to the proper local law enforcement agencies, ALTA also recommends incidents be documented to the FBI's Internet Crime Complaint Center (IC3). The IC3 oversees cybercrimes such as wire fraud using an email hack.
The importance of staying vigilant in this never-ending battle will be a central message of the association’s annual national conference, ALTA ONE, coming up in October. We’re excited because it’s our industry’s biggest conference and is in California this year! Placer Title is looking forward to welcoming our friends to our great state and will blog about the developments we learn that we think could be useful for you.
We’re doing everything we can to protect ourselves, but we need everyone, from our employees to our partners and clients to be vigilant too. If one person involved in the real estate transaction is compromised, it’s a problem for all of us. Let Placer Title Company help you better understand wire transfer fraud and how we can win the war against fraud together.