Protecting Your Clients Against Wire Fraud

Important steps for ensuring personal information remains secure

Buying a house and financing the purchase is an intensive process. Clients will be communicating constantly with your Associates on significant financial and contractual issues. Your customers will come to take those communications for granted. And that complacency can make them vulnerable to fraud. Criminals pretending to be your agents can send emails that trick customers into taking actions or revealing information that risks their financial security. You can– and should– help protect your customers from this kind of fraud.

Email account compromise, the kind of fraud in which a person gets fooled by a fraudulent email, cost victims around $360 million in 2016. One particularly malicious scam targets mortgage and real estate customers, and involves wire transfer instructions. In many transactions, a buyer has funds wired from the lender to an account at the title company. A fraudster sends an email, impersonating one of the participants in the deal and tells the consumer to wire the funds to an account that actually belongs to the criminal. The customer orders the wire in accordance with those directions, only to find at closing that the money isn’t there – it’s been wired to the illegitimate account.

The financial consequences for the customer can be severe and, at minimum, a fraud like this may derail the closing. The customer often has no recourse against the bank, because it accurately followed instructions the customer gave. But if the fraud involved the impersonation of a brokerage email address, the customer sometimes sues the brokerage. So protecting your customers from fraud is good for business, as well as good service.

The best course is making sure customers don’t get fooled by a fraudulent email in the first place. You can reduce the likelihood of somebody impersonating your employees by keeping your accounts secure. A range of common-sense cybersecurity techniques can help protect your email accounts and other IT systems. But even if nobody ever hacks your email, a customer may still get tricked by an email pretending to be from your company. A common tactic is a fraudster sending an email with an address just one letter different from a real one. For example, suppose your customer has been working with bob_the_agent@remax.net. If the customer received an email from bob_the_agent@rmax.net, he or she might not notice the slight variation in the address. And that opens the door to major problems.

To prevent this kind of deception, inform your customers how they will receive sensitive information from your brokerage, and what type of communications to expect. For instance, the brokerage won’t be sending wire information; the title company will do that. So your agents can tell and remind customers of that fact. An easy way to offer a quick education on this is with an email signature line. Consider using one such as: “Don’t fall victim to wire fraud. [Office Name] works hard to protect your personal information and will never provide instructions for transferring funds. If you receive an email requesting personal or financial information, or detailing how to complete a wire transfer, please call to verify its legitimacy.” This approach will make your customers less likely to be tricked by criminals pretending to be with your company. For sensitive information you do send, set up protocols for customers to verify its legitimacy.

Unfortunately, the fight against internet fraud is never-ending. To keep up-to-date on the latest tools, refer to resources such as the Fannie Mae anti-fraud guide and the FBI’s electronic crime site. To understand more about the mortgage process, contact a Motto Mortgage broker or loan originator today.

Shares

Leave a Reply

*