Woman packing who is vulnerable to wire fraud

Protecting Our Customers from Wire Fraud

Oct 11, 2022 Technology Share:

Wire fraud is as prevalent as ever. Unfortunately, it’s also more sophisticated than it’s ever been. Strangely-worded emails with lousy grammar have been eclipsed by savvy, legitimate-looking attempts at fraud.

At South Oak, we work hard to protect our clients from wire fraud. But it takes education and action on all sides to truly prevent wire fraud.

We spoke with Blake Dobbins, attorney at South Oak Title and Closing in Birmingham, to hear about South Oak’s most current efforts to protect customers from wire fraud and what you can do personally to prevent it.

What is wire fraud?

Wire fraud is any kind of financial fraud that occurs through communications technology such as emails, text messages, or phone calls. Wire fraud can happen to anyone at any time. Sometimes these attempts at fraud are obvious: if you’ve ever gotten a poorly worded text message from “Amazon” saying you’ve won something, that’s a not-so-subtle attempt at wire fraud.

Other attempts at wire fraud are more sophisticated. Email addresses that look valid or callback numbers that match a financial organization can trick people into believing that these attempts are legitimate.

But real estate transactions are prime opportunities for wire fraud. Because so much money is changing hands and people are also under a significant amount of stress, home buyers are often targeted with wire fraud attempts.

Does wire fraud really happen?

Wire fraud really does happen – and it isn’t just something that happens to other people. Really intelligent people in our communities truly have the potential to be defrauded. And unfortunately, wire fraud is on the rise.

Blake Dobbins, attorney at South Oak Title and Closing in Birmingham, says, “Wire fraud often looks really legitimate. Fraud attempts usually happen to the buyer. Their email will be compromised, and a fraudster will then monitor the email for communication from the title or closing company. Once an email comes in, the fraudster will use the information from that email (such as email addresses, signatures, photos, or logos) to create a new email that mimics the title company. This new email will tell them where to wire money for closing with a fraudulent account.”

“Buyers who see this are tempted to go ahead and wire the funds. They’re busy, and they don’t want one more thing to have to remember. And they never want to hold up closing. So in some cases, they’ll go ahead and initiate the wire transfer without thinking. Unfortunately, once that money is sent, it’s usually irretrievable.” Buyers can also be targeted with emails that spoof their real estate agent or lender.

How does South Oak protect customers from wire fraud?

Dobbins says, “We take security very seriously at South Oak. We never want our customers to be victims of fraud, so we protect them every way we can.” Customer education is a key part of South Oak’s fraud prevention strategy. We also have very specific procedures in place, such as rarely requiring a wire for closing, to discourage wire fraud attempts. And we regularly employ auditors to ensure that our safeguards are effective.

South Oak is also using Qualia Connect to further protect clients. Dobbins explains, “Using the Qualia Connect portal for communications helps prevent these fraudulent emails. Qualia is as secure as it gets and is virtually unhackable on our end. The software boasts several security certifications, and all South Oak users utilize 2-factor authentication for further security.”

“If agents and clients also use Qualia with 2-factor authentication to communicate with us, the software is completely locked down. It’s nearly impossible for fraudsters to infiltrate the portal, and it’s a much more secure way to communicate than through email.”

Wire fraud attempts also happen with payoff instructions. Dobbins says, “Fraudsters will fax us documents that look like legitimate payoff instructions from a bank. They’ll include all of the relevant information for the sale, including the seller’s information, a close payoff amount, and an accurate payoff date along with the wiring instructions. These also look really legitimate, but at South Oak, we keep verified wiring instructions on hand with known, good, routing numbers. We always verify every set of payoff instructions that we get.”

Because the digital landscape is always changing and fraudulent actors are always adapting, South Oak is always committed to staying aware of risks and trends so that we can stay proactive and protect our customers.

What can realtors do to protect their clients from wire fraud?

Agents need to be serious about protecting their customers from wire fraud, and the best way to do that is through education. Most people just aren’t aware of the risks of wire fraud, especially when it comes to real estate transactions. Agents should educate their clients on these risks any time they talk about money.

Dobbins says, “Agents should always remind their clients to never rely on wiring instructions that are received through an email or text message. Always verify wiring instructions you may receive, but don’t use the phone number that comes with those instructions (unless they come directly from South Oak through the Qualia Connect portal). To verify, use contact information from either the internet or their agent or lender.”

Qualia Connect also features great resources on security and privacy within the help section of the app. Agents can use these resources to help better educate themselves and their clients on wire fraud and digital privacy.

What should everyone remember about wire fraud?

Wire fraud can happen to anyone, but home buyers are especially vulnerable to wire fraud attempts. Dobbins emphasizes, “Never ever send money before verifying! Whether you’re buying a home or getting a legitimate-looking email from your bank, always verify your instructions.”

Technology is a way to make your life easier, but it’s never completely risk-free. At South Oak, any technology we offer has been thoroughly vetted and boasts industry-leading security certifications. While it’s always up to our clients whether they’d like to use the technology we offer, we believe that Qualia Connect is a great way to protect buyers from fraud. Click here to start using the Qualia Connect portal to communicate with South Oak.

South Oak is committed to protecting customers through every part of the real estate transaction, from expert title searches to secure closings. Contact us for more information, or schedule your closing today.