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welcome and thank you for standing by at this time all participants are in a listen-only mode until the question and answer session of today's conference at that time you may press star 1 on your phone to ask a question I would like to inform all parties that today's conference is being recorded if you have any objections you may disconnect at this time I would now like to turn the conference over to dr. Heather Brown thank you you may begin thank you so much operator welcome everyone for attending this important subject webinar today on avoiding wire fraud in the mortgage closing process we have an excellent speaker with us today Cynthia Blair who is the attorney who is an attorney and she's also president of the American land title Association she's been a real estate attorney for many years and out of South Carolina and she was elected to be the 2018-2019 president of the American land title Association and they're very committed to educating our public on the this important issue that we're discussing today that's affecting many Americans so we're going to get Cynthia shortly I just want to run through some preliminary slides that I have for you and let everyone know that the slides will be posted within a few days after each webinar so probably you can check either late well tomorrow's Friday so probably check on Monday it might be up tomorrow but definitely should be up around Monday or Tuesday for anybody that may want to look get a copy of the slide you can download them from our website and I'll show you where in just a second I have to go through my standard disclaimer this presentation is being made by myself as a representative of the Consumer Financial Protection Bureau it does not constitute any legal interpretation guidance or advice from the bureau any opinions or views stated by the myself or our presenter today do not necessarily represent the bureau's views and any third-party links to sites in any of our materials also don't express an endorsement for those sites their content or in products or services that they offer the Bureau has a mission to regulate the offering and provision of consumer financial products and services under the federal consumer financial laws and we are here to help educate and empower and consumers to make informed financial decisions this is being offered by the set of CFPB Finex and that is the financial education exchange for professionals such as yourself we are always looking for new members so please spread the word we have over 5000 members now we offer monthly webinars at least monthly a monthly newsletter and we also are hosting regional meetings or convenings and if you have an interest in hosting a meeting in your area we try to invite lots of our members from that particular area and do sort of regional short conferences a half-day usually but we can do longer if needed so if that's something that interests you please reach out to us at the email on the bottom of this slide CFPB Finex at CFPB gov okay this is the website that you go to that's our landing page for all of our adult education material and the URL is at the bottom and this is where you also go to find the next webinar and our upcoming webinar is going to be on disaster preparedness and liquid savings and these are three other this is a link to the adult education page all in one place our email address as well as our LinkedIn site we do have a LinkedIn group where you can post questions articles ask for information if you need some information from your colleagues just a way to try to keep folks connected and we're also interested in any ideas people have on how to make that become a more rigorous conversation so we're working on building that up too but we tend to get several articles posted every other week or a couple weeks so it's good to check back maybe weekly and at the date and time for our next webinar are located at the bottom of this slide with that I am going to hand it over to Cynthia Blair who is going to be the speaker for the duration of our conference Cynthia are you ready ready to go okay thank you so much and one second my slide is an advancing oh wait a minute let me tie that that's on me sorry I've got to change this to your slides there you go thank you for saying that you're all set I still don't see that on my screen do you see your slide I do not see my slide you see anything that says except that you need to do it except that you're the presenter I do not we did this the other day and it was there I don't care right now I can advance the slide operator can you see if there's anything going on in the background as far as I know the WebEx is functioning properly you may want to take the presenter roll back dr. Brown and see if it'll guarantee those slides okay there's on the presenter now yeah I now see those and it's working for me perfect great all right all right we'll get started thank you all so much for having me today this is a very important topic I wanted to and I'm particularly pleased to be presenting to this group of financial educators because we believe that the best way to combat wire fraud is via consumer education so you're in the perfect position to educate consumers regarding financial issues that affect them such as this so we'll briefly look at the agenda we're going to talk about why what what why you care about this what what is all the hubbub of about secondly we're going to go through the anatomy of business email compromise we'll touch on some of the recently reported frauds and wire fraud examples read to look out for tips for preventing wire fraud how to respond if you are in fact a victim of a wire fraud what you can do to help combat this and then we'll take questions at the end so why should you care well real estate wire fraud is a sophisticated scam targeting individuals that are performing wire transfer payments and of course that's a tremendous issue in the real estate market because many many funds are transferred via wire transfer not limited to the real estate market anywhere funds are being transferred in that manner our target but we know because the scammers are aware that the real estate industry is so rampant with with wire transfers that we sort of have a big bullseye on us the scam is really growing too we've seen an exponential growth here criminals pose as legitimate business email account to conduct unauthorized transfers of funds the FBI's internet crime report identified eleven thousand three hundred us victims of real estate wire fraud in 2018 and these consumers lost a combined amount of a hundred and forty nine million dollars between 2017 and 2018 the FBI data shows one hundred and sixty-six percent increase in the amount of money lost due to real estate wire fraud in the United States email phishing scams targeting real estate transactions exploded 1,100 percent 15 2015 and 2017 47 percent of major financial institutions reported a rise in wire fraud in the last year 20 % of Americans click on links and phishing emails that look legitimate while 50 % of Americans click on links and more personalized fear phishing emails that look legitimate we'll talk a little bit about the difference between those in a few minutes these crimes occur in every state and every sound in every city there really is no safe spot where there's not the potential for wire fraud criminals begin the wire fraud process way before the attempted theft actually occurs most often they begin with a common social engineering technique called phishing this normally takes the form of email messages or website form or even a phone call to fraud obtain private information through seemingly innocuous communication criminals trick users into inputting their information or clicking a link that allows a hacker to steal login and password information once the hacker has gained access to an email account they'll monitor the messages to find someone in the process of buying a home which we know is easy enough to find you can find properties for sale all over the internet and so it's easy enough to make a few phone calls send a few emails to gather information hacks can come from various parties involved in a transaction including real estate agents title companies attorneys or consumers criminals then use the stolen information to email rajala wire transfer instructions disguised to appear as if they came from a professional that the consumer is working with to purchase a home these are the four emotions you need to feel that folks need to be aware of when emails come in phishing type emails come in or emails that are seeking to accomplish a wire transfer fraud greed phishing emails often dangle a financial reward of some kind if you click a link or enter your login information if an email offers you something that seems to be too good to be true it probably is another one is urgency if an email provides a strict deadline this has to be done by 5:00 o'clock today it has to be done by noon a strict deadline that you should be suspicious phishing emails and fraudsters are sneaking to fluster their recipients by creating a sense of urgency and oftentimes of course people want to be helpful they want to be responsive and so their first their first response is okay I've got to do this really quickly and sometimes that will cause you to overlook red flags curiosity people are naturally curious and fishers will take advantage of this by sending emails that promise to show us something exciting or forbidden and so people want to click on that they prey on our curiosity and finally fear caring recipients is a common tactic in phishing emails emails that threaten you with negative consequences or punishment should always be looked at with suspicion and never assume that that what the fraud that what the email says is true some of the most recently reported frauds that have occurred and and they're they're just horrible to think about in Maryland the FBI says fraudsters use fake emails to fool a settlement company into wiring them the proceeds of the sale of a couple's home and the amount was four hundred and eleven thousand five hundred and forty eight dollars law in New York a judge was trying to sell her own apartment she received an email that she thought was from her real estate lawyer telling her to wire the money to a specific account that amount lost was a million dollars in Washington DC home buyers sued the title company for the lost money due to business email compromise but also close to five million dollars for an alleged violation of the RICO Act the title company which denies it had anything to do with the money going missing that it immediately contacted the FBI when the attack was severed the amount lost their one point five seven million dollars and in Colorado a couple who lost their life savings while trying to buy their dream retirement home as filed suit alleging that none of the companies involved in the transaction including a title company did enough protect sensitive financial information their life savings that they lost three hundred and seventy two thousand dollars but you can see this problem affects people all over and in a you know variety of amount next I've got some examples of some spoofed emails and some things for you to look at in the example on the left the real estate agent had an email address that incorporated the company domain but the from was a gmail address so it was designed to make the recipient think it was a legitimate correspondence in addition to digits of the phone number and the email signature lines were transposed but those are of course those are minor details that many people would overlook in the example on the right the email address looks correct but the reply to which isn't actually displayed in most email programs is from Gmail or similar email hosting company so these are some of the things to look for and to educate consumers to look for if they see something talking about wiring money telling them where to wire money more fake email red flags our domain name changes so there'll be a letter insert that you if you don't look closely enough you can't tell that the eye was changed to an L it looks it looks like it's supposed to be it looks like the way it's supposed to be but you if you look closely enough you can see that there's a number that a letter that's changed or a letter substitute so you'll see that numbers are placed in there for the for the letters the zeros are placed in there in place of the O's again if you look quickly you would assume that it was correct look-alike letters so using two V's to equal a W or using n and I to equal an M or a one to equal an i or a zero to equal a no so any of those combinations that can look when you don't look closely enough like the letter that it's supposed to be are things that are used to create false domains domain the name and the email don't match so you've got polar Realty Packer one two three but it could be polar Realty one two three at gmail.com not necessarily you would assume coding from polar Realty but in fact because it's slightly changed it's not the right one three domains also equal danger so if you've got at realtor at polar Realty comm is better than realtor at gmail.com because you pull a royalty calm not a free domain gmail of course anyone can sign up and then finally you've got changes in footer or style to take a look at so those are all red flags for folks to look at when they receive emails anything that is talking about transferring one money via wire transfer so what should you do the first thing and the one of the biggest ways to combat this is to make sure that all consumers know that any time they receive instructions on wiring money they call to verify those wiring instructions by telephone before they transfer the money and use the phone number an own phone number so go to the company's website don't call a number that is listed on the email obviously the fraudsters are aware that we're trying to educate consumers to call to verify that they're going to include a number for you to call hey you can call this number to verify we need consumers to be aware that that's not what you want to do the fraudsters on the other line ready to certainly verify that those are the correct wiring instructions those consumers need to be aware they should always always call a known number go to the company's website or some other method of determining the known number not the number in the website's second be suspicious always be suspicious it's a shame that our society is this way but we need to we need to be suspicious so that we protect ourselves from fraudsters it is not common for title companies to change wiring instructions and payment info it happens occasionally but it is normally done in a manner that a consumer in a specific transaction wouldn't have them change while that transaction was pending so for for a title company to send an email say oh we've changed where we want to send this the wire we've changed our wiring instructions that should immediately be a red flag confirm everything so when a consumer is at the bank about to send a wire transfer they should ask their bank to confirm not just the account number but also the name on the account before it sends the wire and then verify immediately after the wire transfer is done the consumer needs to call the title company or real estate agent to validate that the funds will received now it does take several minutes sometimes a little longer than that for a wire transfer to go through but if the title company is immediately on those occasion that the wire has been sent and they can be on the lookout for it if it's not there within a matter of minutes or an hour or so there's a much quicker much better chance of recalling the wire where it's sent to the wrong place then if it goes for you know a day or more detecting the money that detecting that you sent the money to a wrong account within 24 hours gives the best chance for recovering money and also forward don't reply so when responding to an email hit forward instead of reply and then start typing in the person's email address criminals who are we as we have seen on prior slides criminals use email addresses that are similar to the real one so if you're typing in you at
he consumer or typing in the email address you will make it easier to discover if a fraudster is after you so what happens if it happens you should immediately call your bank and ask them to issue a recall notice for your wire and then the wire transfer fraud needs to be reported to IC 3 gov WI 3 gov and then also the next step would be to call the regional FBI office and the local police it's a little bit of a process but this is these are important steps to take - first of all try to obtain the money back try to recall the money and get it back and second of all so that law enforcement can have more information on these fraudsters IC 3 gov is the FBI's crime center and what it's doing is aggregating the data that's put in there about fraudsters and they're having success with with catching criminals now there are many many out there but when there are successes we know that it's working so the more data that the FBI can compile in this website the better and the better chance they have for for finding details that may help lead them to arresting a fraud stir an and as I said before detecting that the money is sent to the wrong account within 24 hours offers the best chance for consumers to recover their money after that it becomes very close to impossible so unfortunately we weren't able to play this video for you we we tried to get it to where we could play it but we were concerned that the audio on this particular webinar just because of the way it's done the audio and the video wouldn't come out as well so this is a video that the American land title Association created it's about two minutes it provides for tips on how consumers can protect their money and offers advice on what to do if they have been targeted by a scam we encourage everyone to use this video post this video it's use it in any manner that you'd like or you're educating consumers because the more this video is out the more consumer awareness we have believe that let's see I believe that we've posted the link to well you can see it down there actually if you go to youtube youtube.com slash all two videos you can obtain this video and and feel free to use it I urge all of you to go after this webinar is over go and take the two minutes to see look at the video and then feel free like I said to use it in any educational opportunity that you have in front of consumers we think this is a great video to help raise awareness so what can we all do together well I am excited to tell you about a new advocacy initiative that's launched by the American land title Association the coalition to stop real estate wire fraud we know just how vulnerable consumers and our industry is to wire fraud we know that we cannot educate consumers about the risk of wire fraud by ourselves so what are the goals of the coalition well for every real estate title mortgage and escrow professional we need them to raise awareness about the risk and urgency of the problem we need to be able to provide concrete steps to prevent the risk of wire fraud when buying a home or whenever transferring money via wire and when we identify and empower those who have been victimized they can be heard and then they can advocate for other solutions we know that consumers are not sufficiently worried about this problem half of consumers we surveyed in March said they are not concerned about wire fraud at all but nearly 3/4 of them were warned by their real estate agent title company or bank as part of the home buying process and 76% of people said they'd never seen coverage of real estate wire fraud on the news but we know these statistics do not capture those heartbreaking stories that of lost life savings of the people targeted that we talked about earlier and those are just a few examples of the literally thousands and thousands that exist what's shocking however is that the majority of scams aren't even reported because of embarrassment or sensitivity around litigation liability excuse me the FBI estimates that only 12 to 15 percent of all fraud gets reported so if you take the 2018 statistics of eleven thousand three hundred people and 149 million and you multiply that to get a hundred percent you can imagine where we really are or we think we really are with regard to this kind of fraud we know that consumers are most vulnerable when they send their earnest money deposit and then especially when they wire their cash to closed earnest money deposits are done at the earlier stage cash the closes at a later stage so the fraudsters had a lot of time to gather the information about when a transaction is about to occur that we need to empower the professional community with tools we need to empower victims and educate consumers about IC 3 gov I just talked about a few minutes ago we have a duty to care for our clients scare them frankly and explain very firmly that they deploy best practices and then we need to share our experiences you can also help in this national media campaign to raise awareness we need video experiences so to stop wire fraud cut stop wire fraud org to record your own wire fraud story and this is where you would send consumers in the event they have had to have been a victim the experiences that can be shown by the videos of actual victims to wire fraud and help warn others and then contribute to the conversation so we hope that everyone on this call and and everyone within their sphere of influence will help join us in the coalition to stop real estate wire fraud I hope that this webinar has told you giving you enough information to see how how urgent and terrible this problem is and again as I decided to be emphasized in the very beginning consumer education is the number one way we could combat this I hope I've offered some solutions some opportunities for additional education some resources and at this point I will take questions if they're all ready thank you so much Cynthia that was really informative and very efficiently delivered I wanted to let everyone know what operator would you mind letting everyone know how to open their line absolutely if you would like to ask a question at this time you can press star 1 on your phone and record your name when prompted if you need to withdraw your question you would press star 2 again to ask a question by phone please press star 1 it will take a few moments for questions to come through please stand by thank you I had a quick question Cynthia so while we're waiting to see if there's any other questions that queue up I was just wondering how the people that are perpetrating these frauds are gaining access to the information are they using public records or are they you know compromising the email of some of these title companies what what do you think is happening well so data about home home sales is easily obtainable we know that you can easily look on Zillow or realtor.com or any of these other platforms to find homes that are for sale and you can also find out who the real estate agent is oftentimes we find that that's where it initiates they gather data from the real estate agent they make all opposing as an interested party to find out whether or not it's already gone under contract if they gather information if they're able to get information initially that tells them okay a transaction is probably pending then we find that oftentimes the real estate agents or other parties to the transaction are then are then that's the target the title companies are the target we find that many many title companies have put in place a lot of security on their email so we find that while not impossible for it to be the title company that gets hacked it is most often the real estate agent and this is really because so many real estate agents use the free domains so they're using Gmail or they're using hotmail or they're using one of those free domains for their email which is much easier to penetrate so once they have penetrated the email then they're watching the email traffic so they may also at that point find out who the parties to the transaction are the seller the buyer and and their email addresses and perhaps their emails they also they may also be using a free email domain which would again be something they could hack into and and get continue to gather data they can find out who the title company is they may make telephone calls to the title company to ask questions and ask questions that aren't necessarily private information but it get if they're asking oh is this transaction it's a sale happening not that somebody would necessarily give out a closing date but somebody might give out some information that could be could be used in a fraud so all of these ways are ways where fraudsters can gather the information and then once they're in an email that they either create a domain that looks like it so they're appearing to be as though they're from the title company or or they monitor the traffic and and just send an email directly from maybe from the realtor or proposing to be from the realtor sending those fraudulent wiring instructions so that's how we that's kind of how we find the most often most often these things occur now as I talked about phishing and spear phishing we've all seen those emails that come in asking you to click on a link and they may be become much more sophisticated I know that my company receives them often and it will they start out and say closing disclosure attached they know that we're a title company they know that we may expect something like that to come in now we look very carefully at who's sending it and if it you know if it's some somebody from a title company in another state well we know that closing disclosure would nobody would be sending at the closest closure but if they're asking to click on a link oh download this I need you to look at this those are those are red flags and we educate our staff and many folks in the title company and the title arena title industry I'm sorry have begun initiatives to educate their staff on those exact things so if somebody's coming sending you something asking you to click on it that's a red flag stop let's take a look let's make sure that it's not something that is this dangerous before you click on a link because that can oftentimes get someone into your system great thank you for that information operator did we get any questions in queue I'm showing no questions by phone at this time but again as a reminder you can press star 1 on your phone and record your name if you have a question ok well it sounds like you've answered all the questions in your presentation it was very interesting and it really helped me see how sophisticated some of these things are and it makes me want to be more vigilant as well and I just really appreciate you taking time to share this information with us we are going to post this recording online so that folks that were not able to come today will be able to see it and hopefully we'll spread the word to more people and everyone that's on the call could please let those they know around them that would benefit from knowing about this information that let them know the webpage that we have consumerfinance.gov going to Adult Ed where they can get a copy of it and also to view the actual presentation that's on YouTube that we would have loved to share with you it's just a couple minutes but it gets a lot of information out there and so that could also be circulated widely and Cynthia I also invite you to our LinkedIn page and you're welcome to post that video there as well operating so much and when I'm sorry I'm just going to say thank you very much for allowing us to present on this very important topic today our pleasure operator before we conclude our there there are no other questions if not you can give the concluding instructions thank you yes we still show no further questions so that does conclude today's conference thank you for participating you may disconnect at this time you
