Q&A: What do we still need to know about wire fraud?

Q&A: What do we still need to know about wire fraud?

October is Cybersecurity Awareness Month. For lots of you in the real estate world, that means continuing to protect – and educate – your customers about wire fraud. If you haven’t used it yet, the ALTA-backed Coalition to Stop Real Estate Wire Fraud is a great resource on the subject.

Bowe Digital recently talked to one of the stakeholders involved in the coalition, Rich Hopen. Rich is both a real estate broker and  a wire fraud/mortgage payoff scam victim himself. (To learn more about Rich’s story, click here.) 

Even with the increased talk around the subject, Rich said “the awareness around wire fraud is happening very slowly. I can still go out and talk to almost anyone, and they just don’t understand it or know about it.” We hope by sharing our discussion with you that we can keep the discussion going. 

Q: What’s one of your biggest concerns when it comes to spreading awareness around wire fraud? 

There is still a lack of data. The FBI tracks incidents that are reported to its internet crime website, www.ic3.gov. Yet, it’s unlikely the data portrays the (true) scope of the problem. When my mortgage payoff was stolen, I didn’t complete the incident form because I wasn’t comfortable sharing my financial data. I suspect other victims feel the same way. Also, the FBI’s real estate fraud category is too broad. 

The best source of data are title companies. They’re at ground zero when the crime occurs. They are often the first parties to discover when money is stolen by cyber criminals. I’d love to see a process whereby title companies anonymously report wire fraud incidents to an association.

We have stories of real estate wire fraud victims, but without solid data, I don’t think the problem will be widely reported.

Q: Why do you think awareness around this is just starting to grow?

I’ve been immersed in this issue since I was victimized early 2018. I’m still shocked how long it’s taking for real estate wire fraud to receive the attention and resources it deserves. It’s rare for me to find a non-real estate professional who has heard about the problem. More industry resources need to be focused on educating professionals and consumers.

Q: What can title companies do to help?

Title companies should ensure their clients understand the risk of wiring money and how to minimize or eliminate those risks. Warnings on email footers or signed disclosures aren’t enough. Title company employees who interact directly with clients need to have a conversation about wire fraud.

Q: What are some main goals for the Coalition to Stop Real Estate Wire Fraud going forward?

Require real estate professionals to learn more about wire fraud so they can advise their clients how to safely wire money; encourage title companies and brokerages to purchase software that verifies identities of those who send and receive wired funds, and revise wire deposit banking regulations to require banks to match an account number with the account name before depositing funds. And, perhaps most importantly, directly communicate with potential home buyers about the growing threat throughout the home purchasing process.

Richard Hopen is a real estate broker and advisory board member of the Coalition to Stop Real Estate Wire Fraud. Learn more at www.stopwirefraud.org.