Split Closings New Target of Wire Fraud
November 30, 2021
Cyber criminals continue to adapt their schemes and are now targeting split closings.
Diverting seller proceeds and mortgage payoffs appear to be happening with more frequency in markets such as Michigan and Wisconsin where split closings are commonplace, according to Tom Cronkright, co-founder and CEO of CertifID.
He said that of the 10 recoveries CertifID recently assisted with, three involved split closings.
“Criminals are understanding the nuances of how we do business on a jurisdictional, market-to-market level,” Cronkright said.
By monitoring emails, criminals can quickly understand how a split closing works and take advantage of potential weaknesses in the communication and verification of wire instructions between title companies. ALTA’s Information Security Committee developed a checklist to verify outgoing wire information.
Title companies should not assume another agency has an equal policy for validating wire instructions. Cronkright said this assumption often leads to a “level of trust and blindness on the part of the disbursing title company” that can lead to disastrous results. Therefore, it is critical in all transactions to continue to follow your company’s wire fraud policy in order to validate and deliver non-compromised information, including wire instructions.
Title companies should independently verify and confirm all wires being sent, even when the instructions are provided by another title company.
Resources
- ALTA Outgoing Wire Preparation Checklist: Use this checklist as a best practice for verifying outgoing wire information.
- ALTA Rapid Response Plan for Wire Fraud Incidents: The standard ALTA Rapid Response Plan for Wire Fraud Incidents has been developed by the ALTA Information Security Committee.
- ALTA Wire Fraud Infographic: This graphic outlines the steps a consumer should take to avoid becoming a victim of wire transfer fraud.
- Video: Share this video with customers to alert them about the dangers of wire fraud.
Contact ALTA at 202-296-3671 or [email protected].