How to Prevent Wire Fraud in a Home Purchase

According to a recent blog post by the American Land Title Association, over $1 billion in wire fraud losses occurred due to online schemes in 2017.

Title agencies and Realtors have spent the last decade improving their security policies, implementing new industry standards, and training employees to spot attempted wire fraud. However, scammers have started to transition from targeting the title companies and lenders to targeting the homebuyers and sellers who may not have the same level of training to spot criminal activity.

That same blog post by the ALTA cited an interesting fact about the vulnerability of homebuyers:

According to the BuyerDocs’ market surveys, 52.2 percent of 200 recent homebuyers are completely unaware of wire fraud in real estate. On top of that, 74 percent of those surveyed believed their title company or bank can recover funds that are wired to the wrong account.

Therefore, it is vitally important that homebuyers stay vigilant to ensure that they are not scammed during the home purchase process. Most fraud attempts use “social engineering”, or attacks that rely upon human vulnerability and seek to manipulate people to trust emails or requests that they otherwise should suspect is potentially a fraud. Criminals will create realistic-looking email templates, email addresses (often times with misspellings or foreign domain suffixes), or even fake websites that appear to be real banking or mortgage lending companies but, in fact, are simply ways to convince you to provide your login information.

Once the scammer has collected your user names, passwords, bank account numbers, or other similar information, they immediately transfer your funds to an account they control (and then often move the money around multiple times to make it harder to trace and recover).

Check out our flyer “Protect Your Information” from the First American Title Insurance Company for steps you can take to protect yourself from wire fraud. And remember to always contact us if you are not sure whether a request from our title agency is legitimate before you act upon it.