Consumer education at the center of wire fraud mitigation efforts

Key Takeaways:

– In 2022 and 2023, fraudulent activity in the housing market remained high despite the market slowdown.
– CertifID’s 2024 State of Wire Fraud report found that 25% of home buyers and sellers surveyed were targeted with suspicious or potentially fraudulent activities.
– The three main categories of fraud impacting victims were seller impersonation fraud, fraudsters impersonating the title agency, and fraudsters impersonating lenders.
– Mortgage payoff fraud had the highest median value per incident at $257,000, while wire fraud had a median value of $72,000 and seller impersonation fraud had a median value of $70,000.
– The Federal Bureau of Investigation reported that business email compromise in real estate impacted 2,284 victims in 2022, resulting in $446 million in losses.
– Over half of respondents were not adequately aware of the risk of wire fraud before closing on their real estate transaction.
– Consumers expect real estate agents and other transaction participants to educate them about wire fraud.
– Consumers aged 65 and older were at the greatest risk of becoming victims of wire fraud.
– Title insurance firms reported providing more guidance and education on wire fraud compared to other real estate industry professionals.
– The volume of cybercrime attempts increased or remained the same from 2021 to 2022.
– Title professionals who conducted more closings per month had a greater risk of cybercrime.
– The share of title professionals who recovered the total amount of funds incorrectly transferred due to fraud increased from 17% in 2021 to 26% in 2022.
– Title firms have increased their cybercrime mitigation efforts.
– Two-thirds of companies reported recovering more than half of the stolen funds, and the average consumer loss was $1000 or less.
– Title firms are spending up to $25,000 a year on mitigation efforts.

HousingWire:

Even as the housing market slowed in 2022 and 2023, the fraudulent activity of bad actors did not let up.

In its 2024 State of Wire Fraud report, wire fraud protection firm CertifID found that nearly 25% of the 650 U.S. home buyers and sellers it survey were targeted with suspicious or potentially fraudulent activities, while 10% were targeted for real estate fraud and 5% suffered losses during their real estate transaction due to fraudster.

In total, CertifID’s Fraud Recovery Services received 463 requests for help from victims of wire fraud. The three main categories of fraud impacting victims were seller impersonation fraud, fraudsters impersonating the title agency and tricking buyers to wire their down payment to a fraudulent account, and fraudsters impersonating lenders and sending title companies fraudulent mortgage payoff instructions. Mortgage payoff fraud victims had the highest median value per incident at $257,000, while wire fraud impacting victims had a median value of $72,000 and seller impersonation fraud had a median value of $70,000.

Of the survey respondents that reported receiving fraudulent communications, 26% reported that it came from a potential buyer or seller, 22% came from a real estate agent, 15% from a lender, 14% from an attorney working on the transaction and 12% from the client’s title agency.

According to a report from the Federal Bureau of Investigation, business email compromise in real estate, which is how most wire fraud is conducted, impacted a total of 2,284 victims in 2022, resulting in $446 million in losses.

“Cybercrime rings have taken aim at U.S. real estate transactions at an alarming rate,” Katie Pierce, the assistant to the special agent in charge of the Global Investigative Operation Center (GIOC) at the U.S. Secret Service, said in a statement. “Consumers and their real estate service providers need to take extra precautions in every transaction, including verifying identity and banking details, to ensure payments are made securely and safely.”

Even more alarming than the rise of wire fraud, is that over half (51%) of respondents were not adequately aware of the risk of wire fraud before closing on their real estate transaction. In addition, 60% of survey respondents reported that their real estate agent provided little to no information discussing the risks of wire fraud.

Over a quarter (27%) of respondents said they expect their real estate agent to educate them about wire fraud, while 71% of respondents said they expect their real estate agent, title company, attorney or other transaction participant to take initiative and educate them.

“The real estate industry has a lot of work to do when it comes to educating consumers and putting guardrails in place that protect real estate transactions,” Tyler Adams, co-founder and CEO at CertifID, said in a statement. “This report highlights the particularly high risks in real estate transactions which involve multiple parties being impersonated, unsuspecting consumers, large sums of money, and lack of strong protections. It’s imperative that the industry comes together on behalf of the consumer, to step up its effort to fight fraud, and to create a safer customer experience.”

CertifID found that consumers aged 65 and older were at the greatest risk to becoming victims of wire fraud, as 63% reported being only somewhat or not at all aware of the risks of wire fraud and 75% reported minimal to no education on fraud risks. Wire fraud is significantly costly for this cohort of buyers as they are more likely to have larger down payments or be all cash buyers than younger buyers.

While consumers reported little to no guidance or education on wire fraud from the real estate industry professionals they worked with during their home buyer or selling journey, title insurance firms reported different findings. The American Land Title Association’s Cybercrime and Wire Fraud study, which surveyed 470 title industry professionals, found that well over half of respondents warned clients about wire fraud and sent them frequent written reminders.

The most common form of warning was one included in the footer of an email at 85%, followed by oral or telephone warnings at 67%, written warnings mailed to clients at 41% and specific warnings on a title firm’s website, also at 41%. Additionally, 64% of respondents said they communicated with customers frequently about wire fraud and cybersecurity using written reminders, while 31% said they provided warnings or education at the beginning on the transaction process and 30% said they did so at the time of closing.

“Title insurance companies protect their business and customers by conducting a range of mitigation efforts, including customer and real estate agent training, simulated phishing testing of employees and wire/payee verification software,” Diane Tomb, the CEO of ALTA, said in a statement.

Despite these differences, ALTA’s report, which analyzed cybercrime in 2022, also found an increase in cybercrime attempts, with more than 90% of title professionals surveyed reporting that the volume of cybercrime attempts increased or remained the same from 2021 to 2022.

The study found that the more closings per month a firm conducted, the greater the risk for cybercrime, with 73% of companies who conducted 250 or more closings a month reporting an increase in cybercrime, followed by 61% for companies who conducted 76 to 250 closings per month and 38% for companies that conducted 75 or fewer closings each month.

However, the good news is that the share of title professionals who reported they were able to recover the total amount of funds incorrectly transferred due to fraud, rose from 17% in 2021 to 26% in 2022. Additionally, two thirds of companies reported recovering more than half of the stolen funds and the average consumer loss was $1000 or less.

In addition to educating consumers, title firms have also worked on their cybercrime mitigation, with 86% of respondents reporting that they engage in mitigation activities, up from 63% a year prior. Additionally, 66% of respondents reported spending up to $25,000 a year on mitigation efforts.

“Fraud attempts are increasing compared to a year ago, meaning title and settlement companies must be even more vigilant,” Tomb said in a statement. “In response to the increased attacks, more companies have mitigation efforts in place, so while there is still significant concern about the issue, companies are better equipped to protect their businesses and customers.”

Source link

Property Chomp’s Take:

is a commonly used element in HTML that is used to create divisions or sections on a webpage. It is a versatile and powerful tool that allows web developers to organize and structure their content. Whether you’re a beginner or an experienced developer, understanding the

element and its various uses is essential for building effective and visually appealing websites.

One of the primary purposes of the

element is to group related elements together. By enclosing multiple elements within a

tag, you can apply styling and formatting to them as a group. This makes it easier to manage and manipulate the content on your webpage.

For example, you can use

to create a header section at the top of your webpage that contains a logo, navigation menu, and other elements. By wrapping these elements with a

tag, you can apply CSS styles to the entire header section, such as setting a background color or adjusting the spacing.

In addition to grouping elements, the

element can also be used to create layout structures on a webpage. By setting the CSS display property to “flex” or “grid” on a

container, you can easily create responsive and dynamic layouts that adapt to different screen sizes.

Sidebar
Main Content

In the above example, the

container uses the “flex” display property to create a sidebar and main content section. The “flex: 1;” and “flex: 2;” properties determine the relative widths of the two sections.

Furthermore, the

element can be used to add structure and organization to your HTML code. By using

tags with appropriate class or id attributes, you can target specific sections of your webpage with CSS or JavaScript.

Welcome to my website

Lorem ipsum dolor sit amet, consectetur adipiscing elit.

In the above example, the

with the class “container” and the

with the id “content” can be easily targeted and styled using CSS or manipulated with JavaScript.

In conclusion, the

element is an essential part of HTML that allows web developers to group, structure, and style elements on a webpage. Its versatility and flexibility make it a valuable tool for creating visually appealing and well-organized websites. Whether you’re a beginner or an experienced developer, understanding how to effectively use the

element is crucial for building modern and responsive webpages.

Leave a Reply

Your email address will not be published. Required fields are marked *