A few weeks ago, I wrote a post likening email escrow fraud to Whac-A-Mole. I’d like to revisit that image for a moment.
A few years ago, scammers figured out what our industry does. Admittedly, it took them a while, but when they did, many agents started seeing a barrage of fraudulent emails. Title agents responded by tightening down on their policies and procedures.
The “mole,” however, always manages to find a weak spot where he can pop his head out of the ground. In our case, that weak spot is clearly the consumer.
Ah, the consumer…
When I think about the consumer in a real estate transaction, sometimes I remember a scene from a 2004 episode of the popular TV show Friends, where Monica (Courteney Cox) and Chandler (Matthew Perry) are trying to convince Joey (Matt LeBlanc) to see the new house they’re buying in the suburbs.
Joey: “But no, it’s not close. You said it was in escrow? I couldn’t even find it on the map.
Chandler: “No Joey, escrow is (pause) well, there’s money in (pause) it’s not the bank exactly (long pause) I don’t know what it is.”
And of course, it’s the real estate agent who ends up explaining escrow to everyone.
A consumer buying or selling a home is excited about completing the transaction. The truth is, despite our best efforts, they’re apt to be at least a little hazy about everything going on. Consumers rely on settlement agents, real estate agents, attorneys and loan officers to make sure things go smoothly.
Fraud is likely the last thing on the consumer’s mind, but title agents are in a unique position to help consumers understand the dangers of fraud and the steps they can take to protect their funds and personal information. Here are some things to tell the consumer early and often during the transaction.
USE EXTREME CAUTION
Fraudsters are targeting buyers and sellers. Unwitting consumers have been scammed into wiring funds to fraudsters. Consumers should be wary of any email purporting to be from a closing agent or another party to the transaction that has a generic domain at the end, like “gmail” or “mail.”
FOLLOW PROCEDURES
Discuss your company’s procedures for accepting, verifying and changing wire instructions. Establish any pin codes or challenge questions you might use to identify the consumer.
VERIFY, VERIFY, VERIFY
If the consumer receives an email from your agency regarding wiring funds, they should verify the information by contacting your office using a pre-determined telephone number, and not a number on that email.
NO SHARING!
Discourage the consumer from sharing wiring instructions or other banking information with third parties, including the real estate agent.
NEVER WIRE FUNDS BASED ON EMAIL
Most of all, let the consumer know they should never wire funds based on an email, even if the email appears to come from the title company, the real estate agent, the bank or anyone else.
We’ve developed an infographic outlining these important consumer communications, and we encourage you to find points during the transaction where it makes sense to deliver and reinforce these messages with buyers and sellers.
Alliant National recently produced a white paper on escrow fraud as part of our ongoing effort to inform agents about the threats we all face. The paper provides tips for spotting suspect emails and other communications. I’ll be back next week with a post exploring the steps each one of us can take when a communication just doesn’t feel right.
