How to Protect Your Title Company from Wire Fraud

Today’s newsletter is 655 words and a 3 1/2-minute read.

Welcome back to Qualia Innovator! In this edition, we delve into effective strategies title & escrow professionals can use to keep their businesses and clients safe from wire fraud.

Key insight: People power security

The bottom line: Adopting technological solutions with the highest security standards is essential, but companies must also build and maintain an intrinsic culture of security among staff and clients.

Why it matters: Research by Stanford University, in collaboration with cybersecurity entity Tessian, reveals that human error accounts for approximately 88% of data breaches. A similar study by IBM Security reports this figure to be around 95%.

What does this mean? Employees create vulnerabilities in security.

The way to win: Prioritize security training.

It's our job as leaders to stay on top of the message and keep security relevant and execute training and prevention regularly. Brent Scheer , EVP & Chief Operating Officer at Advocus National Title Insurance, Co

???? Have regular training to help staff understand their pivotal role in data protection and wire fraud detection.

????? Teach staff about the key protections available in your software and encourage universal adoption.

Go deeper to learn more about creating a culture of security.

Key insight: Bad actors thrive on the limited cybersecurity knowledge of homebuyers

By the numbers:

• An Intel Security Quiz revealed that 97% of people can’t identify phishing emails
• Atlas VPN discovered that 23% of people aged 18-40 and 19% of those aged 41-55 admitted to being duped

The way to win: Equip homebuyers with a comprehensive education about wire fraud.

?? This educational framework should not only cover the types of wire fraud they may encounter, but also:

• The nuanced tactics that scammers employ
• Current and emerging scam scenarios
• Essential guidelines for conducting secure financial transactions

?? The key lies in offering clear, actionable examples and tips. General warnings aren’t enough; empower homebuyers by providing them with concrete strategies and insights they can directly apply to enhance their financial safety.

Don’t know where to start? Visit American Land Title Association’s website for staff and consumer resources.

Key insight: A hybrid people & technology approach is essential for risk reduction

What's happening: Based on a survey of title professionals conducted by Qualia, 66% of title & escrow respondents currently use manual methods to prevent wire fraud. This may be driven by recommendations from wire fraud experts advocating for manual verification steps.

Why it matters: The threat of wire fraud is constantly evolving. Manual verification alone is not only prone to errors but also gives modern fraudsters more opportunities to deceive their victims.

To elaborate: When relying solely on manual verification, there's the risk that a bad actor’s email includes their own contact number. In this scenario, title agents would end up calling that deceptive number for verification, lending an air of legitimacy to the fraudulent email and keeping agents in the dark about the scam.

The way to win: Adopt a hybrid approach—human verification and oversight, coupled with the integration of software that assists in the fraud mitigation efforts.

???? Manually confirm instructions or call to confirm any changes.

???? Implement a solution that covers as many opportunities for fraud as possible.

Go deeper to read more about wire fraud detection and prevention tips.

Overall takeaway: It takes layers to beat the schemers

The bigger picture: Title & escrow companies have a responsibility to implement a robust defense against fraud. Given the evolving nature of the threat, there’s unfortunately not one foolproof solution.

The blueprint: Fraud detection and mitigation requires a convergence of tactics—training staff, educating homebuyers, a hybrid approach to wire instruction verification and risk reduction, and secure communication exchanges.

Put simply: Wire fraud prevention takes a village with the right infrastructure to combat ever-evolving threats.

Up next on Qualia Innovator, we’ll switch gears to cover the unfortunate situation many title & escrow companies face—what to do if you fall victim to wire fraud. We’ll provide best practices for responding quickly, communicating with affected parties, and recovering losses.

Until next time, keep your eyes peeled and your wires protected.

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