SIMPLE STEPS TO KEEP YOUR CLIENTS (AND YOURSELF) SAFE
BY BILL RISSER, VP OF DIGITAL STRATEGY, FIDELITY NATIONAL TITLE
Fraud has been a part of the real estate industry since the
first transfer of real property. Misrepresentation and forgery
are just a couple examples of fraud that have been around
forever. In the last 15 years or so, a new breed of criminal
has targeted the industry using technology. These fraudsters
focus on the movement of funds via wire transfers. The use
of checks, personal or certified, represents a small fraction of
the money flowing through escrow accounts. Wire transfers
do not bounce for insufficient funds, and these transfers make
up nearly 100 percent of the money involved in a real estate
transaction.
Not surprisingly, the popularity of email as a communication
tool is a major factor in the rise of wire transfer fraud. More
specifically, cloud-based email accounts that are easily
accessible by anyone with internet access present the biggest
threat to real estate professionals. Most Realtors® use either
Gmail, Hotmail, Yahoo, and a few holdouts still have AOL
accounts. These email providers are cheap, easy to learn, and
very popular.
Be Aware! Online banking fraud is on the rise. If you
receive an email containing wire transfer instructions, call
your Escrow Officer immediately to verify the information
prior to sending funds.
EDUCATE CLIENTS
As you begin working with new buyers or sellers, have a
conversation about wire fraud. Make sure they know you will
never send them wire transfer instructions. If they do show up
from you, tell your customer to call you immediately.
CONFIRM BY PHONE
Before sending any funds via wire transfer, have your
customer contact you and confirm with the title company
the instructions are correct. It is important to use the contact
information for the title company that you know to be true,
not contact information in the wire transfer instructions.
BEWARE OF PHISHING ATTEMPTS
Fraudsters are highly skilled at imitating trusted sources, like
Google, MSN, Yahoo or even PayPal. This practice is known
Nearly all wire fraud today in the real estate transaction follows as phishing. Fraudsters trick unsuspecting targets into giving
up their username and password. Any email asking for you to
this simple premise:
log in for an “update” is suspect. Closely look at the sender’s
•
A fraudster tricks an unsuspecting agent into giving email address and Google the email subject line and look for
claims of fraud.
up their username and password to their email account
•
The fraudster monitors the flow of emails in the
agent’s account, waiting for emails detailing the transfer of ENABLE TWO-FACTOR AUTHENTICATION
Every cloud-based email service (and many other sites like
funds via wire transfer
•
The fraudster “spoofs” or imitates the hacked email Dropbox and Evernote) have the option of enabling 2-Factor
account of the agent and provides “corrected” or “amended” or 2-Step Authentication. Some experts have said that if
wire instructions to the buyer or title company, diverting the every Realtor® enabled 2-Factor Authentication, 95% of wire
transfer fraud would be eliminated. To enable this option, go
money to the fraudster’s account.
to settings and look for the link to security, then follow the
The above is a simplified view of the scam, but it outlines provider’s instructions. When turned on, any attempt to log in
the areas that Realtors® need to secure. Below, I have listed to your account from an unrecognized device will require the
five things every Realtor® should do to make it as difficult entry of a six digit code texted to YOUR mobile device.
as possible for fraudsters, and help prevent their clients from
This short article and five things to do is to help you, the
becoming a victim of this growing problem.
Realtor®, become aware of the steps you can take to protect
your clients, and ultimately, yourself. Vigilance and proper
EMAIL SIGNATURE
Add a warning message to your email signature. This will set-up of your accounts goes a long way to preventing wire
remind customers with every email about the dangers of wire transfer fraud.
fraud. Here is an example:
10 RPCRA.ORG | SEPT/OCT 2017