By Valerie J. Grandin, Senior Vice President and Chief Underwriting Counsel and Vice President and Elyce Schweitzer, Regulatory Compliance Officer
Every wire fraud defense expert agrees on one thing: the number one factor in recovering diverted funds is time. Every minute counts once fraud is detected, and hesitation or delays can make it harder to track down and restore lost funds.
That’s why a wire fraud response plan is imperative for every title agent.
The American Land Title Association (ALTA) recommends that every title company develop, document and train every staff member in the critical first steps for effective responses to wire fraud incidents. ALTA’s own Rapid Response Plan for Wire Fraud Incidents, can help agencies prepare to respond quickly and effectively as outlined in key points highlighted in this article.
Elements of a Wire Fraud Response Plan
The first step in preventing fraud is maintaining strong policies and procedures for verifying the identities of parties to the transaction and wire instructions to protect all parties: Buyer, seller, lender, underwriter and title agent. Alliant National agents are urged to implement procedures making sure to Verify, then Trust – every file, every party, every time.
But if the unthinkable happens, the most successful response strategies are those established in advance and clearly communicated to all staff members, banking partners and transaction participants.
Like a well-trained sports team, every member of your organization should understand their role and be ready to act immediately if fraud is detected.
General protocols
- Establish a close relationship with your bank representatives and maintain regular communication about emerging fraud threats and response procedures.
- Make sure you have a phone contact that is not an “800 number” to avoid delays.
- Discuss wire retrieval scenarios with your bank and establish emergency contacts in the bank’s fraud department that can be reached immediately if fraud is suspected.
- Share this information with every employee as first reactions are critical.
- Establish and document emergency contacts across your response network, including bank fraud departments, law enforcement, legal counsel and your underwriter.
- The local FBI office and the Secret Service office in your region should be included in this contact network.
Rapid response actions
- Your staff should be trained to immediately alert company management and the ageny’s internal wire fraud response team if a suspicious or potentially fraudulent transfer is detected.
- Encourage transparency as delay or fear of retaliation for errors can cause losses to increase.
- Contact the sending bank’s fraud department immediately and request a recall of the wire transfer due to suspected fraud. Ask the bank to initiate the FBI’s “Financial Fraud Kill Chain Process” if applicable.
- Notify the receiving bank’s fraud department and request that the account receiving the funds be frozen pending investigation.
- Report the incident to appropriate law enforcement agencies, including your local police department, the FBI field office serving your jurisdiction, as well as Secret Service teams.
- File a complaint with the FBI’s Internet Crime Complaint Center (IC3) as quickly as possible via their website, IC3.gov.
- Inform the parties to the transaction using known, trusted phone numbers and established communication channels.
- Notify your underwriter and coordinate next steps. Alliant National’s Claims Team and Underwriting Counsel are available to assist agents in evaluating and responding to suspected fraud events.
- Contact your own agency legal counsel to assess potential liability and assist with recovery efforts.
- Depending on the circumstances, notify appropriate insurance carriers such as cyber liability, escrow security bond or errors and omissions insurers.
- Do not delay these notifications as missed deadlines on notices can result in a claim denial and financial losses for your agency.
Putting all of these resources in motion immediately is critical to securing the support of professionals or organizations with tools that could assist you in recovering the diverted funds.
The FBI’s Internet Complaint Crime Center, IC3.gov, is one of your most important contacts. According to the FBI’s 2024 Internet Crime Report, the IC3 Recovery Asset Team initiated the Financial Fraud Kill Chain on 3,020 complaints involving $848.4 million in attempted theft[i]. Financial institutions were able to freeze $561 million of those funds, representing a 66% success rate.
The effectiveness of this process depends heavily on how quickly fraud is reported, which is why having a response plan in place and acting immediately is critical.
Even the most vigilant companies may fall victim to fraud, but having a clear response plan and trained team in place can significantly improve the chances of recovering lost funds.
As always, immediately reach out to your Alliant National Claims Team and Underwriting Counsel if you have any questions or concerns. Together we can fight fraudsters, but always remember to take the steps to stop fraud and Verify, then Trust – every file, every party, every time.
