Let’s run through a real life scenario to explain why it is important to encrypt emails pertaining to a closing…
On July 24, 2019, an exchange company sent a final disbursement of remaining proceeds to a real estate exchange company after they completed the purchase of their final identified property. At the written direction of the exchanger, the funds were to be sent by wire transfer. The exchange company representative verified the bank wire information with the exchanger using a known, trusted telephone number. The remaining funds were then successfully sent to the exchanger’s account in the amount of $649,696.69.
A day after receiving the remaining proceeds into her account, the exchanger called the exchange company’s exchange coordinator. According to the exchanger, on July 25, 2019, a person went into a local branch of her bank with a fake identification card. She described it as a driver’s license reflecting her name — with someone else’s picture.
The fraudster attempted a bank heist by trying to withdraw $649,696.69. The bank teller did not allow the withdrawal and the bank notified the exchanger immediately. The exchanger, at the advice of the bank teller, called the police and reported the incident.
The purpose of the call to the exchange coordinator was to let the exchange company know about the incident and to be on alert. The police officer suggested to the exchanger that someone tipped off the fraudster to the fact a large sum of money was recently deposited to the account.
The exchanger thanked the exchange company for the extra effort it went through to ensure the wired funds were safely transferred to her account. She wanted the exchange company to know about the attempted theft, because she knew it takes security seriously.
The exchange coordinator explained there was a chance the fraudster was monitoring the exchanger’s emails and through email messages discovered funds were being wired to the account. The exchange coordinator thanked her for sharing the scary incident with them. Then the coordinator advised the exchanger to change her email password, change bank accounts and hire a security professional to further review the incident.
MORAL OF THE STORY
You never know if someone you are conducting business with has had his or her email account compromised. The use of unencrypted email to communicate sensitive information can alert a fraudster to important events, such as when a wire transfer of funds will be disbursed or the amount of the funds to be transferred.
Even scheduling signing appointments using email can tip off a fraudster monitoring emails that the closing is imminent. These are scary times for the real estate industry and we all need to be alert and aware of the potential ways fraudsters use email to gain information.
As the largest title company in the nation and a Fortune 500 company, Chicago Title is committed to protecting you and we have the resources to do just that! If you would like to learn more about how we can help you, please do not hesitate to reach out!
By Jill Bright, AVP/Sr. Sales Executive Chicago Title