There is a very disturbing trend these days in wiring fraud affecting the transfer of funds to or from Title Companies. The scam involves consumers (and even some professionals) receiving bogus wiring information that results in them wiring their funds to close to online thieves. This can cost people their life's savings in an instant, not to mention the loss of their dream home.
According to the FBI, wiring transfer fraud increased an astounding 480% in 2016 alone. Business Trial Group, a contingency free litigation firm reports that in 2017, these schemes cost homeowners over $1 billion.
This is not just a problem for folks elsewhere. It has hit folks right here in Oregon too.
The fraud usually takes the following form:
1. Fraudster hacks into a Title Company's server and finds out what transactions are pending.
2. Fraudster sends an authentic looking email to a consumer telling them exactly how to wire their funds to close. This is called "Spoofing".
3. The Consumer follows these instructions and sends the money straight to the crooks.
The fraud is generally only discovered once the title company contacts the consumer or their Realtor® asking them for funds to close. By then the crooks have transferred the money out of the country. THERE IS LITTLE OR NO RECOURSE.
This trend is terrifying. How can you protect yourself?
If you are transferring funds to escrow:
First of all, you should treat every email asking for funds, no matter how authentic it seems, as suspect.
1. CALL the title company and confirm the information is all correct...especially the wiring information...or
2. Go to the title company and get a hard copy of the wiring information and the amount to close...or
3. Go old school and get a cashier's check and hard carry it to the title company. Make sure to get a receipt.
If you are receiving funds from the sale of a home:
Ask the title company for a cashier's check and hand carry it to your bank.
Never pass along an email to your title company telling them where to send funds to. If you must wire money to your bank, give the title company a cancelled check or go to your bank and get a printed set of wiring instructions specific to your bank account.
Don't be afraid to go to the title company and/or bank and ask questions. They want things to go smoothly as much as you do. No one is more terrified of this fraud trend than the title companies themselves. It would be ironic indeed if the risk presented by transferring funds to the title company itself is greater than the risk of receiving clean title, which is the whole purpose of title insurance in the first place!