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Wire Fraud: Don’t Let It Happen to You

We have recently been inundated with news articles about a new way to execute an old crime. As we know, criminals and fraudsters are always coming up with new ways to beat security measures, and the current fashion in high-tech, high-dollar fraud has mostly affected buyers of real estate.

Most of the time, when real estate changes hands, there are at least a handful of wire transfers of money that occur where money is transferred electronically between the banks. These transfers are faster, less expensive, and typically safer than using checks. Unfortunately, if anyone fails to take proper precautions, it can be disastrous. When a computer hacker is able to intercept messages containing wiring information, among other confidential material, they can cause all kinds of problems, but recently they have been sending incorrect wiring instructions to buyers of real estate. The buyer will show up for the closing thinking that the title agency or escrow company is holding their down payment, but instead, the transaction is stalled and a criminal has made off with their money.

We have a few tips for you to make sure you don’t wind up on the wrong end of one of these crimes:

  1. Do not send any of your personal information to your attorney, title agency, CPA, doctor, or other professional who handles sensitive information using an unsecure method. This means that a garden variety email and the fax machine at the library are both bad places to start. At Lardiere McNair, we use a program called Protected Trust when we send emails containing sensitive information – this program encrypts the message and requires the use of another communication method, either a pre-set password or a code you receive by phone, to allow access. Most lenders and title agencies use programs like this or web-based secure portals to handle this information.
  1. Do not send a wire transfer based only on written instructions. Call your point of contact at the business you are paying and ensure that they can confirm the wiring information you have verbally. This way you know that the instructions they have in their file match the ones you are using to wire the funds.
  1. If you receive an unsecure message that contains your sensitive information, insist that your vendor change his or her information security practices. It can be costly to implement new systems, but that is nothing compared to the cost of a significant fraud event.
  1. If you receive wiring instructions that cannot be verified by other means, do not use them. Your title agency would rather receive a certified check than not receive your funds at all.
  1. Ensure that your computer and email systems have mechanisms for ensuring the security of your data. We have all seen in the news what can happen when someone’s computer, phone or tablet is hacked. By taking proper precautions for yourself, you reduce the risk that something like that happens to you.

If you have any questions about this, please give us a call. We are happy to explain what we do to keep your data safe and how we can help your business be in the best position to protect your clients, your employees, and yourself moving forward.

Ben Worsowicz is an Associate at Lardiere McNair, LLC.  To read more about our firm, please visit http://lawyerscolumbusohio.com/.
The information presented here has been prepared by Lardiere McNair for promotional and informational purposes only and should not be considered legal advice.  This information is not intended to provide, and receipt of it does not constitute, legal advice.  Nor does the receipt of this material create an attorney/client relationship.  An attorney client relationship is not established until such time as Lardiere McNair enters in to a written engagement agreement with a specific client for a specific legal matter.

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