Here’s some news that would keep anyone in the title industry up at night: Wire and title fraud risk in the third quarter of 2022 reached an all-time high, with 47.9% of all real estate transactions reporting at least one indicator of potential fraud. Even though everyone in the industry is vigilant after years of combating fraud, your business and your client’s hard-earned money are still at risk. We strive to keep our partners in the title industry informed of the latest tactics and trends that scammers use to attack your business and put you at risk. Keep reading to find out more.
Mortgage payoff fraud is when a criminal infiltrates the closing process to divert funds into their bank accounts instead of their legitimate destination. Their tactics usually involve impersonating a lender or title company and sending false wire information to your clients. This type of fraud accounted for $6.9 Billion in losses in 2021 and an average of 552,000 complaints per year from 2016-2021, according to the Federal Bureau of investigations.
The danger is real. So how can you fight back? The key is ensuring you and your clients recognize common forms of fraud. Here are some tactics that fraudsters may use that you should keep your eye on:
Fraudsters use phishing emails to gain access to your client’s personal information. If you click on a link from a dangerous phishing email, it could give the criminal access to a client’s email address, leading them to the ultimate victim.
With Spoofing, fraudsters can impersonate you using your exact email address. This will make it extremely difficult for your clients to recognize whether the communication is legitimate.
Once they have your client’s information and can identically impersonate your email, fraudsters will email them an urgent message. They will tell them that the wire information for the transaction has changed and give them new wire information. If your clients don’t recognize this as a sign of fraud, they may send their money to the fraudster’s bank account, which is incredibly hard to get back.
So what can you do to combat this growing problem? First, you must educate your customers on the dangers and the signs to beware of. The American Land Title Association has excellent resources to teach clients precisely that. They can stay protected if they know not to respond to urgent messages, not to send their info through email, and call you directly whenever they feel a problem.
We know staying vigilant of fraud while running a busy business can be overwhelming and lead to mistakes. That’s why NTS wants to take this worry off your hands. With our Payoff Management Services, we handle the entire payoff process and complete a quality check to ensure it is free of fraud. Even after the closing is complete, we ensure that the payoffs are correctly released and recorded in the public record.
If you want to learn more about how we can protect you and your clients, contact us at 813-750-1665 or firstname.lastname@example.org for more information!