Title Agents losing funds in Payoff Fraud
Hackers have truly unlocked a cold rush of money as they continue to steal unsuspecting buyers and sellers funds in the property buy and sell transaction. However Title Companies have become an increasing target from hackers because of bigger payouts.
“Bank Transfer Fraud” or “Wire Fraud” is becoming a daily occurrence. If you do a quick google search you will see Orlando family loses $46,000, Supreme Court Judge loses $1 Million, Alabama family loses $250,000 and the list goes on.
Bank Transfer Fraud is when hackers will pose as a party to the transaction and replace the bank wire instructions with the hackers bank account information to steal your money.
Cyber security is becoming a major concern in the real estate industry.
Hackers are now even creating “fake portals” like bank website or finance websites making it harder for consumers to realize they are not dealing with the legitimate source. Hackers are getting smarter and using the speaking and tonality that is native to location.
What is Payoff fraud?
Payoff fraud is when fraudsters impersonate a lender or another title company to receive the funds from disbursement after the settlement process, either from refinancing or the sale of a property. Fraudsters use common tactics found other wire fraud scams to send a falsified payoff statement with wiring instructions to the targeted settlement agent.
How do cybercriminals commit payoff fraud?
The usual phishing and social engineering are part of the payoff fraud scheme, but they also create elaborate spoofed portals and pose as individuals involved in the transaction, usually the lender or mortgage holder.
Yes the internet has made our life easier, but it has also made it easier for hackers to steal your information.
A spoofed portal or website is a page that mirrors another site’s URL and page content. Unsuspecting victims are usually lead to these sites by clicking on a link in an email that looks like a legitimate communication from a financial institution or another title company. If a company hasn’t taken proper cybersecurity precautions, it’s also possible for hackers to gain access to the site itself and redirect visitors to a fake site where the criminals capture sensitive information like social security numbers and bank account routing numbers.
Hackers are getting smarter and even providing phone numbers for your to call or text to speak with a person to confirm your transfer has been completed.
Consumers need to be aware of their Title Companies phone and email, and website address. You will find that Hackers will change one number in the phone number. Or be using a .co website address instead of a .com. These little details matter and can make it harder for unsuspecting consumers to be aware they are being taken advantage.
Time Pressures increase Hackers ability to dupe title companies
The time pressures created by everything a title agent needs to get done to complete a transaction. Make it easier for Title Agent’s to be taken advantage of and be given false wire transfer information documents.
Faxes are not safe! There was this myth that if we fax the information it will be safe. Hackers have faxes and can even send digital faxes. They will send you an email, then send the fax and then send a email confirming the fax with the instructions has been sent. Hackers will use the same letterheads, signatures of the financial companies as part of their impersonation.
Assume Your Email has been Hacked!
Security experts assume your email servers have been hacked. You may have been hacked weeks ago and you didn’t even notice. Due to the increasing nature of social engineering scams or email phishing scams. All you need to do is click on one link in one email, or social media post to make your entire system vulnerable.
But it get’s worse. Because there are so many parties to a transaction it could be the Lawyer, or Real Estate Agent, or Title Company that has been hacked and you don’t even know it.
Email was not designed for sending securing information. The way we use email today is leaps and bounds different from it’s initial designs.
Lack of Insurance Coverage
Most title companies don’t have adequate insurance to cover these new cyber crimes due to gaps in their E&O Polices and Cyber Insurance Policies. This is where www.ChatFortress.com can help eliminate wire fraud and payoff fraud. Providing secure communication and insuring every transaction for $1 Million dollars via the www.ChatFortress.com communication channels.
How do we stop payoff fraud?
Awareness is the first step in eradicating wire transfer fraud and payoff fraud.
- Educating buyers and sellers
- Not using email for secure communication.
- Using Biometric authentication and validating communication.
- Training internal safe about email spoofing and phishing scams
- Keeping your security processes up to date
Title Agents, Law Firms, Real Estate Agents are guardians of the transaction and are liable for these hacked transactions. As guardians all parties need to be responsible for ensuring a secure and safe transaction.