Homebuyer's Life Savings Stolen in Wire Fraud and then Successfully Recovered for a Timely Closing

GRAND RAPIDS, Mich., Feb. 23, 2021 /PRNewswire/ -- Buyers involved in the home purchasing process are at risk of losing their life savings to cyber criminals as they seek to divert wire transfers to fraudulent accounts. This type of fraud, commonly referred to as "Business Email Compromise" or "BEC" costs companies and consumers over $3.5 billion in recent years, according to the FBI's most recent Internet Crime Report – accounting for nearly half of all cybercrime losses. 

As a second-time home buyer outside of Denver prepared for the purchase of his new home, he received an email appearing to come from the title company asking him to wire his closing funds early in the transaction.  "The emails appeared convincing and included my exact amount for closing that had previously been discussed by the title company," said Taylor, a recent wire fraud victim who last name has been omitted for privacy reasons.  "I received the wiring instructions and wired just under $80,000 as instructed.  Two days later, I was notified that the money did not arrive at the title company and that's when I realized my life savings had been stolen."

Fortunately for Taylor, his title company quickly engaged and advised him how to notify the financial institutions involved of the crime.  "We know that buyers may be approached by fraudsters at any time and when funds are transferred, it's hard to get them back – time matters." said Angela Lozano, General Counsel for Title Forward, a Redfin title company.  "We worked with the buyer to alert the banks and attempt to freeze the accounts so they could be returned."  Despite these efforts, two days had passed, and the banks provided no assurance that the funds were secure. 

Realizing that time was running out, Mrs. Lozano made contact with CertifID's CEO and funds recovery expert, Tom Cronkright to assist in returning the funds.  Within minutes of receiving the request for assistance, Cronkright gathered the emails and bank information and deployed CertifID's Funds Recovery Services to launch a coordinated effort that involved the U.S. Secret Service to recover the funds. "Time was truly of the essence, so we got to work in finding and freezing the account where Taylor's funds had landed," said Tom Cronkright, CEO of CertifID and former wire fraud victim.  "Within a few hours, we had confirmation that his funds had been secured and on track to be returned to him – a great result given the timing of everything." 

Within a week of transferring his funds to cyber criminals, Taylor's life savings was safely returned to his bank account and he is now enjoying his new home.  "The entire experience was shocking, and I consider myself lucky to have been surrounded by professionals that selflessly jumped in to help me," said Taylor.  "If I can be tricked, anyone can.  Home buyers need to not only be aware of this risk in a general sense, but they also need to know what forms it can take; the latter part was what I didn't know. Having better knowledge and surrounding themselves with people who 'get it' will help protect them as they send money for closing.  I was a lucky one." 

This crime, which has reached an epidemic level in recent years, occurs as fraudsters use email phishing techniques to gain access to an email account of someone involved in a transaction. This access provides real-time transaction details including amounts that buyers are required to transfer for the upcoming closing of their home.  Armed with this information, the fraudsters impersonate the title company and send fraudulent wiring instructions to buyers with a request to send funds immediately or the transaction may be canceled or delayed.  Once the funds are stolen, they are hard to recover as cyber criminals use elaborate networks to launder funds to avoid detection and recall.  "We have seen a sharp increase in real estate wire fraud in recent months," said Stephen Dougherty, Cyber Investigations Division (GIOC), U.S. Secret Service. "Cyber criminals are using information found in compromised email accounts to trick consumers into sending funds to fraudulent accounts.  Taylor had a favorable result because his title company was aware of the risk, most home buyers are not as lucky."

Low inventory levels for existing homes has created one of the tightest housing markets in U.S. history which adds stress to buyers seeking to enter the market.  By the end of the process, buyers are often fatigued and exhausted, making them more susceptible to falling victim to a wire fraud as they are asked to send money for their closing. Education, awareness and securely exchanging wiring instructions can help lower this risk and keep buyers safe. "Buyers should inquire as to how their real estate agent; title company and lender safeguard their respective email accounts and protect them from wire fraud – the threat of losing their life savings is too great to ignore." said Cronkright.  "With heightened awareness, communication and security standards, all parties in a transaction can be safer from the threat of loss." 

About CertifID: CertifID provides Money Protection Services to safeguard the transfer of funds for participants in real estate transactions. Its proprietary solution protects businesses and consumers from fraud by securely transferring bank account information. CertifID guarantees each wire up to $1 million after identities have been confirmed and wiring instructions securely shared. Learn how CertifID's Money Protection Services can help your business and your customers by visiting: www.certifid.com.

SOURCE CertifID

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