Even though January is nearly over, the Colorado Title & Closing Services team is still thinking about how we can help make the year ahead a happy and successful one for you. We have a suggestion for one way you can make 2022 a better year for your clients and you:
Talking as much as possible with your clients about the dangers of wire fraud.
Not a fun subject, we know. But one recent story from North Carolina of a buyer who was scammed out of nearly $50,000 is an excellent reminder to all of us, whether you’re a loan officer, Realtor, or just a good friend, that we must do our part to communicate the very real risks wire fraud poses to our clients. Providing the client’s cell number and email address with the order allows CTS to reach out to the client with information about our procedures to prevent wire fraud before the criminals can misinform them.
The fraudsters will attempt to get inside the email server of someone associated with the closing to see how the transaction is proceeding. With social media, it is much easier for fraudsters to identify who to target. When the transaction is getting close to closing, the criminals strike by sending a bogus email, typically to the buyer, with fraudulent wiring instructions for the funds to close.
The client should always call a known good number to verify the wiring instructions before initiating the wire. They should also call the title company within 4 to 8 hours after initiating the wire to confirm that the wire was received. They need to make sure they have a good number to call.
A third party monitors our IT system, and our closers have dual authentication to ensure that our system is secure to protect your client. However, we cannot protect the client’s email from being hacked by a criminal, thus the need for education about wire fraud at the beginning of the transaction.
Here are a few warning signs you can educate your clients to watch out for when they first go under contract prior to the closing process:
- Receiving wiring instructions that list a different bank than disclosed on the requirement page of our commitment.
- Emails that contain grammatical errors dismissed as typos – though it is important to note that these criminals are getting smarter. They should not assume a message without typos means it is legitimate even if it appears to come from a legitimate email address.
- Repeated urgent requests to wire the funds or a sudden change in wiring instructions. They should compare the bank on the wiring instructions with the bank disclosed on the requirement page of the commitment to make sure they match.
- The name of the Realtor/loan officer/title agent in the signature, but a change in the email address. The change may be very subtle, i.e., a “1” instead of an “i” in the email address. Never reply to a suspicious email; it is best to forward to a known valid email address.
If any of these warning signs are detected, the client should contact their closer immediately to discuss and verify the wiring instructions.