Defend Your Business & Clients from Wire Fraud

Defend Your Business & Clients from Wire Fraud

Today’s newsletter is 507 words and a 2 1/2-minute read.

?? Hello, title & escrow pros! Welcome to the launch of Qualia Innovator, our new LinkedIn newsletter where you can stay ahead of the curve with a roundup of innovative tips and insights from industry leaders and Qualia experts.

What to expect: You’ll receive these delivered directly to your LinkedIn feed or inbox any time we publish if you subscribe. (So don't forget to subscribe!)


In our first edition: We’re talking all about a top-of-mind challenge faced by all title & escrow companies today: wire fraud—just ahead of Cybersecurity Awareness Month.

1 key highlight: Wire fraud isn’t slowing down

What’s happening: Wire fraud is on the rise in the United States, and scammers are getting bolder. The total value of wire transfers that criminals attempted to divert from real estate transactions rose by 205% between Q4 2021 and Q4 2022.

Convictions for wire fraud are also going up. If things keep going like they are, 2023 could be a record-breaking year. Experts predict more than 1,100 convictions for wire fraud schemes next year alone.

Why it matters: One of the most common real estate-related cybercrimes is wire fraud. Criminals are targeting homebuyers for many reasons. Additionally, various parties involved in the transaction heavily rely on email to exchange non-public information (NPI) and other sensitive data. As long as this method of exchange is standard, wire fraud will continue to grow.

That’s because the highest reported fraud in real estate in 2020 was Business Email Compromise (BEC), and it’s only increased since then.?

A fraudster impersonates a real estate representative by email, attempting to divert a homebuyer's funds to a fraudulent account. The email uses a spoofed sender address to appear legitimate.

Did you know?

  • BEC caused $2.7 billion in losses in 2022
  • Fraudsters claimed 21,832 victims in 2022 through BEC

Narrowing the focus:

  • From 2020 to 2022, victim reports of real estate BEC scams to the FBI increased by 27%, and associated victim losses increased by 72%
  • A survey of nearly 550 title agents nationwide conducted by ALTA’s Research & Analytics Work Group found that a full recovery of lost funds was only possible in 29% of cases

Wire fraud can occur at any point in a transaction, whether during the initial sending out of money or the eventual receiving of funds.

The way to win: Preventing and detecting wire fraud.

?? Create a culture of security in your organization

??? Detect it before it happens

?? Have a layered approach to combating wire fraud

In our upcoming newsletters, we'll provide more detail on how to mitigate wire fraud using the methods mentioned above. We'll also share information on what to do if you fall victim to wire fraud. We’ll keep it all concise and informative, so you can get back to your closings!

Stay vigilant, friends.


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Anne Webster

Chief Operating Officer at Dalton & Finegold, LLP

1 年

Great content thank you!

Charles Cheung

Experienced Project Management and Implementation Professional | Strong Cross-Functional Leadership | Agile and Strategic Approach | Expert in Business Analysis and Problem Solving

1 年

The alarming surge in wire fraud underscores the pressing need for heightened vigilance and cybersecurity measures across industries. As the real estate sector becomes a prime target for fraudsters, it's evident that relying solely on conventional practices can no longer suffice. To combat this growing threat, organizations must cultivate a culture of security, integrating robust detection mechanisms and adopting a multi-faceted approach against wire fraud. The staggering statistics serve as a stark reminder that the battle against cybercrime is ongoing and requires collective diligence. In the age of evolving criminal tactics, staying one step ahead is not an option but an imperative. A few options to mitigate against wire fraud: Better education and training, strong authentication such as MFA, verified contact information, and secure communication.

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