Imagine the joy and stress of buying your dream home. As you are managing dozens of tasks from packing, arranging movers, cleaning, etc. you receive an email from your realtor or lender with a last minute change of plans to your closing. The request is simple; due to a minor mix up you need to wire the funds to a new location as to not delay your closing. Because you have built trust with this individual and because of the immense amount of stress you are under, you quickly do it. Unknowingly, you have just redirected your life savings to a criminal and those funds are likely never to be seen again.
While the example above would appear to be a plot of a thrilling fictional movie, it is actually far more common than you would think. Title companies reported a 480% increase in wire fraud attacks in 2016 and a 2,370% increase in identified exposed losses. Even at our title company in Knoxville, TN we see several of these attempts per year and the frequency in which they are occurring is steadily growing. We remain vigilant, while the tactics and strategies used by criminals are constantly changing and adapting as technology is increasingly introduced into financial transactions.
The specific example above is commonly referred to as Business Email Compromise (BEC). Fraudsters become aware of an email chain between client, realtor, and/or lender through email systems such as Gmail, Hotmail, AOL, etc. From there, the fraudster does his best job at cloning or spoofing either the realtor or lender’s contact information. He then begins emailing and/or calling the others in the loan closing process. These BEC jobs are very elaborate, going as far as creating new domains, copying email signatures, and using common writing styles as the individual spoofed. At quick glance, the fraudulent emails can barely be detected unless reviewed closely. And because they are very well done and the entire real estate industry relies on email, people are frequently losing their life savings to these criminals.
As an organization, we have several safeguards in place to prevent a successful BEC attempt. However, we only control a piece of the closing process. Here are a few tips to prevent becoming a victim of fraud yourself.
Tip 1: Avoid using free email services that offer limited security
Tip 2: Never change wire instructions based on an email or call
Tip 3: Always call multiple sources to verify information
Tip 4: Read emails very closely, looking for misspelled words
For more information and a full list of tips, please visit the FBI’s article below. http://www.fbi.gov/news/stories/business-e-mail-compromise-on-the-rise
President and CEO