Wire Fraud and Tips to Avoid Becoming a Victim

Wire fraud is a growing issue for consumers and financial institutions involved in real estate transactions.  According to the FBI, the number of wire fraud scams reported by title companies to Internet Crime Complaint Center (IC3) spiked 480% in 2016.  Perpetrators are monitoring real estate transactions and timing fraudulent requests for changes in payment type or payment destination to take control of the money.

Two common wire fraud scams are the Business Email Compromise (BEC) and Email Account Compromise (EAC).  The BEC is a scam that targets businesses who work with suppliers and/or regularly perform wire transfer payments.  The EAC targets individuals who perform wire transfer payments.  These scams have been reported in all 50 states and in 131 countries.  Victim complaints filed with the IC3 and financial sources indicated fraudulent transfers have been sent to 103 companies and criminals sought to steal around $5.3 billion through this type of fraud.

Several ways to avoid falling victim to these types of fraud in your real estate or mortgage experience are 1) never open unsolicited links or attachments, 2) avoid sending any sensitive financial information by email and 3) use an independently-verified phone number to confirm wiring instructions for the earnest money deposit and/or closing funds.

Businesses should also follow these practices and contact law enforcement immediately if fraud is suspected.  The FBI makes it easy to file a report online at https://www.ic3.gov/default.aspx.  The simplest steps can make sure that fraud will not occur in your transaction.  Matching the payee’s name with the account number is a simple yet effective way for financial institutions to avoid the wire fraud trap.

Setco stays on top of the latest safety standards to handle your wire transfers safely and efficiently.  We require all closing funds to be sent by Federal Wire to add another level of safety to your closing. Contact us today to find out how we can work with your real estate transaction quickly and safely.

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