Choosing the right title company to conduct your closing, one that is well-trained and takes the risk of wire fraud seriously, can prevent you from suffering a devastating and life-changing event.
Title companies, realtors, and their clients are susceptible to attempts of wire fraud from all over the world. No matter the size of the transaction or the location of the title company, criminals make attempts at stealing your money through the federal wire system in many ways.
The most common of these attempts occurs through email accounts being compromised. For example, hackers can monitor the account of a realtor and learn when a closing is to take place. The hacker then creates an email account that so closely resembles the real email address of the realtor, that it goes unnoticed by the closing agent (i.e. the hacker creates a nearly identical email address, but replaces an “l” with a “1”). The hacker using the fake email address requests a last minute substitution to wire the seller’s proceeds to a different account that the hacker controls. The email usually comes last minute and in the haste of preparing the closing and keeping the customer happy, the title agent falls for the trick and sends the wire to the wrong account. Often times, the fraud could have simply been prevented, had the closing agent picked up the phone and verified the change in wire instructions with both the realtor who purportedly sent the email, and with the customer who was to receive the funds.
Unfortunately for the customer, the wire fraud is not discovered until it is too late to reverse the wire and the money is gone. Once that wire transfer has completed, it is extremely difficult to recover what has been lost as the money is usually transferred to unreachable foreign accounts. The FBI investigates wire fraud crimes, but rarely has the resources to track down each individual event of wire fraud unless the loss is in the millions. The result is a catastrophic loss on the individual who did not receive the funds to which they were entitled. Not only is their money gone, but they do not have the value or use of the real estate they just sold.
The monetary loss is not always covered by insurance, or the insurance is inadequate to cover the loss, and to recover for the loss, the seller is stuck in a lawsuit against the real estate agents and their brokers, the buyer, and the title company. The nightmare continues!
Sellers are not the only party at risk in a transaction, as the title company’s email account is also susceptible to hacking – which can result in the buyer receiving fake wire instructions from a hacker asking the buyer to wire their funds to the hacker’s account rather than the title company’s account.
Heartland Title Agency utilizes secure systems to send wire instructions and also warns our customers that we will never change our wire instructions mid-transaction. It is critical for all parties involved to communicate if anything seems unusual or out of place.
The staff at Heartland Title Agency, LLC has been trained to spot wire fraud red flags and have systems and checks in place to eliminate the risk of a wire fraud incident. Heartland Title Agency attorneys work closely with real estate agents to educate them about the risk of and their susceptibility to wire fraud. Please contact any of our Heartland Title Agency offices, or our Ashland Title Agency office today to handle your real estate closing needs.