WIRE FRAUD HAS BECOME THE BOGEYMAN of real estate transactions—ever present, always evolving and capable of unraveling deals in seconds. For title and settlement professionals, safeguarding client funds isn’t just a best practice—it’s a duty central to maintaining trust.
Cybercrime resulted in record losses of $16.6 billion in 2024, according to the FBI’s 2024 Internet Crime Report. Wire fraud contributes to a multimillion-dollar problem, with the FBI reporting record losses of nearly $175 million tied to real estate transactions in 2024. Fraudsters often infiltrate email accounts, create near-perfect replicas of documents or impersonate trusted professionals to trick buyers into misdirecting funds.
“Fraudsters are not taking a break,” said Andy White, CEO and founder of Closinglock. “They evolve constantly, and they only need to be successful once. We need to be right every time.”
Melissa Neesen, vice president of operations of Tennessee-based Reliable Title, recalled a close call when a client received what appeared to be a legitimate email update with new wiring instructions. The only giveaway was a single misplaced letter in the sender’s email address.
“If our staff hadn’t double-checked, those funds would have been gone,” she said. “It was a sobering reminder of how small mistakes can have huge consequences.”
Step One: Standardize the Process
The foundation of any fraud prevention program is clear, standardized procedures that follow ALTA’s Best Practices. ALTA recently updated the Best Practices to include guidance that helps title professionals combat fraud through identity verification efforts.
“You cannot leave this to chance or individual discretion,” Neesen explained. “Every employee must know the exact steps for initiating, verifying and confirming wiring instructions.”
At Reliable Title, Neesen said, her team created a “no exceptions” checklist. If any step is skipped, the transaction doesn’t move forward. It’s that simple, she said.
Educating the Client
Even the most robust internal controls can be undermined if clients don’t understand the risk. Nathan Watson, client coordinator at Reliable Title, stressed the importance of repetition in consumer education.
“Customers need to hear the warning multiple times, in multiple ways,” Watson said. “We put it in our engagement letter, we tell them verbally and we send reminders in every communication leading up to closing.”
When a file is opened, Watson said, clients receive a welcome letter that includes information about the technology that will be used and what to expect during the transaction.
“Our real estate agents appreciate this because they realize that not only is it protecting their clients, but it’s protecting them as well as us,” Watson said.
Technology as a Shield
Technology also plays a critical role in preventing fraud.
“Technology isn’t a silver bullet,” White cautioned. “But it raises the barrier to entry for fraudsters, which is what we need.”
Closinglock’s platform, for instance, helps companies securely deliver wiring instructions through portals rather than email. It also enables compliant, insured account-to-account transfers without the need for manual wire instructions. White also advocated for multi-factor authentication and fraud detection tools that alert teams when something looks suspicious.”
“If something looks out of character—a wire amount, an email domain—the system tells us to stop and review,” White said.
The use of multifactor authentication, which is an ALTA Best Practices requirement, is the standard for Reliable Title. Neesen said it’s not optional for her company.
“There is not a software program or piece of technology that we’re using that does not have that built in,” she said. “It’s such a normal part of our day that it actually feels very invisible now. Whenever I go to sign in on the computer in the morning, I have my phone because there’s going to be an authenticator app I need to go to, or I’m getting a text sent to me, or just something that I need to do in order to get access.”
Culture of Security
While technology and processes are essential, a company’s culture may be the strongest defense.
“Training isn’t a once-a-year exercise—it has to be part of daily operations,” Neesen said.
At Reliable Title, team meetings include a “fraud moment,” where employees share suspicious activity they’ve caught. “It creates a culture where vigilance is celebrated,” Neesen explained.
Watson noted that employees should feel free to slow down even if it frustrates clients. “Sometimes clients just want to move quickly, but we tell them your money is more important than speed,” he said.
White agreed, stressing that empowering employees is critical. “You want your team to feel like guardians of the client’s money,” he added.
While criminals target funds being electronically sent, they also are reverting back to check fraud. Suspicious Activity Reports related to check fraud have nearly doubled from 2021 to 2023, according to the FBI.
Watson said Reliable Title recently received a $150,000 earnest money check for a $2.5 million purchase. The company held on to the check because if was from out of the country, and it wasn’t typical in their market. Within a few days, the contract was canceled. The “buyers” then wanted their EMD funds refunded through a wire.
“Fortunately, we didn’t deposit that check. We definitely dodged a bullet.” Watson said.