The Expert Podcast

One of the scariest things we're seeing in financial fraud are these misdirected transfers. It could be a title company doing a real estate closing, or it could be a purchase from a company. We had one a couple of weeks ago where a municipal fire agency was purchasing a fire truck and they sent their money to pay for the fire truck to the wrong place.

How does this happen? Hackers break into a system or an email of a company. It doesn’t have to be any of the companies involved in the transaction; it could be an associated company, like a home inspector or even a contractor. On these email chains, they’ll have all the information about an upcoming purchase. For example, in a real estate transaction, there are lots of people involved: home inspectors, mortgage brokers, insurance companies, utility companies, electrical, cable TV—any of these companies involved in the closing will know when the closing is happening, how much it is, and the details. A lot of these emails are CCed to all these people, so everybody knows when the closing is happening.

These hackers will gather up all this information, and at some point, they’ll decide to attack this transaction. What they do is, when the time is right, they send an email to the person paying the money, saying, "Here's where you send the money, here's your wire transfer." It looks like it came from the right place—they have all the right names, all the right logos, all the right information. The poor buyer then sends their money to a hacker, and it's gone—overseas, and it's lost.

The same thing can happen in business. If you're buying a large piece of equipment, hackers will monitor the suppliers, or even a low-level tech person. They get the information and send the buyer the wire transfer information, but it’s wrong.

This cybercrime is very difficult to prevent, but there is an easy way to protect yourself. If you just send a test payment before sending any large amounts via wire transfer—send 100 bucks, 50 bucks, whatever it is—and make sure that it goes through properly to the right place, you can avoid this fraud. For the kind of money we're talking about, it's very important to prevent it. Without that test, you could lose your down payment on a house, or, if you're a business, you could lose your purchase of equipment.

In the case of that fire department, they had saved money for years to buy a new piece of apparatus, and without that, it put their community at risk. So, do this test anytime you send a large transaction. You can check out our website, verifyescrow.com, for instructions. There's no cost; it's just a free checklist of how to handle a large transaction.

You want to send a test wire transfer before you send anything large, and then verify with the actual recipient that they got that small payment before you send the whole amount.

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