ALERT! Wire Fraud Continues to be on the Rise 

Over the last 2 years, we have experienced a record volume of business in our industry. Unfortunately, along with that increase in business, wire fraud attempts by cyber criminals have also increased. All title companies, whether handling both sides of a deal or in a split transaction, are targets of fraud. Based on the sheer volume of money exchanged on a day-to-day basis, fraud attempts will continue to grow. As we head into the holiday season when such fraud attempts typically ramp up even more, this is a reminder that we all need to remain vigilant about implementing and maintaining best practices and policies regarding wire transfers in order to keep all parties safe from fraud.

One aspect of the title industry that appears to be particularly vulnerable to wire fraud attempts are the delivery of seller proceeds and the delivery of mortgage payoffs. These diversions appear to be happening with more frequency in split closings.

According to Tom Cronkright, Co-Founder and CEO of CertifID, there has been an increase in wire fraud occurring in split closings in markets where these types of transactions are commonplace, such as Wisconsin and Michigan. In fact, of the 10 recoveries that CertifID recently assisted with, 3 of those involved split closings. Tom notes that “criminals are understanding the nuances of how we do business on a jurisdictional, market-to-market level”, which means that by monitoring our emails, the criminals are able to quickly understand how a split closing works and take advantage of potential weaknesses in title company-to-title company communication and verification of wire instructions. Since each title company has its own policy for validating a customer’s wire instructions, it is important not to assume that the other company’s validation process is as stringent as your own. As noted by Tom Cronkright, this assumption often leads to a “level of trust and blindness on the part of the disbursing title company” that can lead to disastrous results. Therefore, it is critical in all transactions to continue to follow your company’s wire fraud policy in order to validate and deliver non-compromised information, including wire instructions.

In light of this heightened risk for wire fraud, the WLTA is recommending that you independently verify and confirm all wires being sent by your company, even when the instructions are provided by another title company.

Please be safe and follow your company’s best practices to protect you, your company and all parties to the transaction. Stay tuned for additional information on cyber security in our industry.