Wire fraud and email hacking/phishing attacks are on the increase! The busy season is when the fraudsters try to strike. They like busy times, like the end of the month, end of the tax year, and spring market. While everyone is busy, all it takes is one party to the transaction to let their guard down, and there could be a loss. Here are some recent scenarios that were avoided:
- Attempts at diverting EMD funds by intercepting emails before they get to the title company.
- Telling the parties that a settlement has been “moved” to a new title company very close to the actual closing date to divert closing funds.
- Asking borrowers to wire funds well in advance of closing and asking them frequently in a short period of time to do so.
- Sending emails supposedly from the realtors in the transaction asking borrowers to send funds right away.
- Changing contracts of sale to reflect a different escrow agent to divert the EMD.
- Cash deals are especially at risk.
- Deals involving large down-payment amounts are at risk.
If you have an escrow or closing transaction with a title company and you receive an email containing Wire Transfer Instructions, DO NOT RESPOND TO THE EMAIL OR FORWARD IT! Instead, call the title company immediately or the previously known contact information of your settlement agent or attorney, and NOT information provided in the email, to verify the information before sending funds. When in doubt, ALWAYS CALL TO VERIFY.
BE AWARE- wiring instructions usually do not change. Buyers, sellers, and lenders should NEVER wire money (EMD or closing funds) without first confirming by phone directly with the title office that the wiring instructions received are correct.
Be sure to educate yourself and your clients about wire fraud to ensure a smooth and stress-free closing!