EDUCATION & TRAINING: Wire Transfer Fraud & Prevention

15 Oct

EDUCATION & TRAINING: Wire Transfer Fraud & Prevention

Fraud comes in many forms, but the most common in our industry right now is CYBER FRAUD with outgoing wires. Know how to protect yourself and your clients. It has become more common and the fraudsters are getting better at it.

Cyber fraud is when credit and financial information is criminally stolen or taken online by a hacker. Imposters to your transaction commit cyber fraud most often by phishing, a term used for posing as a part of the transaction either as a real estate company, title agent, or a buyer or a seller via email. Scammers email homebuyers claiming that down payments and closing funds need to be wired elsewhere.


√√ Talk with your customers early and often about the closing process and money transfer protocols, including alternatives to wiring funds.

√√ Remind customers to NEVER respond to emails about wiring funds, and ALWAYS call you at a known number before agreeing to anything via email. Stress the importance of not using phone numbers or links from an email.

√√ Watch the email addresses you receive emails from regarding your transactions. It is common for hackers to change one character of an email address to fool victims.

√√ Instruct customers to avoid emailing any financial information.

√√ Have the bank confirm the name on the account and look for any red flags in the wiring instructions before sending funds.

√√ It is uncommon for title companies to change wiring instructions and payment information by email.

√√ A cashier’s check is an excellent option for avoiding wire fraud. The title company can verify checks with the bank prior to funding.

√√ Consumers should verify with the title company within four to eight hours to confirm the transaction funds were received.


I have added a link below to show how this happened to a Hurricane Harvey victim:


New Updates for Wire Fraud Prevention

In light of ongoing wire fraud in real estate transactions, the MLS Advisory Group and Board of Directors, along with the Texas Real Estate Commission, have approved a rule change effective immediately.  The new rule prohibits listing participants from entering or submitting title company information into MLS.   This action is in response to increased reports of wire fraud originating from scammers posing as the title representative for the title company referenced in MLS.  This prohibition includes references to a title company in agent remarks, attached documents, or anywhere else in the MLS system.  Also, “Selling Agent” and “Selling Broker” will be removed from display on the agent full report while a listing is in pending status.

***There is also a new TAR Wire Fraud Warning Form 2517, which the agents should provide upfront to the buyer and seller.  Please review the attached form.    This form is not required for closing; however, brokerages are requiring the agents to have the form signed and included as part of their transactions.***

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