Fraud Insight from a Reformed Cybercriminal and the FBI: What Happens When Fraud Occurs
This is third and final installment of a three-part series that contains insights from the top experts in fraud prevention. The focus is to shed light on the current state of fraud as well as how to take action before and after a fraudster strikes. If you missed one of the previous sections, you can still find them on our website here: Part 1: The State of Fraud Today and Part 2: Fraud in 5 Easy Steps.
The following is a summary of our discussion with FBI special agents, insight from the former “Internet Godfather,” Brett Johnson, and the Title Tech Council.
What Happens When Fraud Occurs
In the final installment of our series “Fraud Insight from a Reformed Cybercriminal and the FBI” we’ll focus on what you can do if you or one of your clients has fallen victim to fraud. Most title professionals have sought out the proper tools and best practices to prevent fraud. But what type of plan should you have in place to react to a fraud situation? That’s exactly the question we asked the FBI special agents. Building on our understanding of The State of Fraud Today and how cybercriminals commit Fraud in 5 Easy Steps, we outlined initial steps that can be taken when fraud occurs.
What to Do If Fraud Occurs
If a transaction comes under siege in your office, and you realize you’ve just been defrauded, the you should contact the bank in the victim’s city, local law enforcement, and local FBI field office as soon as possible.
Once a fraudster has stolen the money it's extremely difficult to recover those funds. However, everything you do immediately after the incident can improve the probability of recovery and help law enforcement build a case against cybercriminals. Syncing up with your team to evaluate what type of plan you have in place if fraud occurs is crucial in increasing the likelihood of recovering lost funds. Make sure everyone in your company knows what they should do.
Filing a Report
Recovering lost funds and stopping fraudsters is a complicated task for banks and law enforcement. Contacting all the necessary entities is critical to the success of your report. Each group serves a vital role, and, unfortunately, it’s often up to title professionals to start the process. So it’s important to note that some banks won’t do anything until there is a police report and the FBI doesn’t provide reports, which is why it’s recommend to always contact local law enforcement to get a file of the incident started so that it can be used by the other two units.
However, contacting local law enforcement isn’t the only step needed. It’s the FBI that is cable of stopping the money from moving and eventually disappearing through various accounts. Within the first 72 hours the FBI can help with the freeze of the wire. While they cannot freeze international accounts, they can notify law enforcement in that particular country to freeze the necessary account(s).
In order for the bureau to do this effectively, they will need the following information:
All pertinent wire information
Essentially, the more information you have readily available for the FBI, the better. Other important information that you should be ready to provide is:
Indicator of Compromise (IOC)
Email addresses as well as content of sent and received emails
IP addresses of all devices involved in the transaction
Forensic photo of the server (only if the server was hacked)
Once the FBI has all of this information, there are typically two possible outcomes. The first is that the funds are recovered, meaning there will not be an investigation into the actions of the fraudster as a case isn’t opened. The second is a longer process. If the the funds aren’t recovered the investigation will be opened and the FBI will use all the information they have to essentially provide the prosecutor with rationale to pursue the case. While this is not the ideal outcome for the victims of fraud, it does help the FBI identify trends and improve awareness of fraudulent schemes. Additionally, there are primarily two main influences on whether a case will be opened by the FBI and pursued by the prosecutor: the amount of money at stake and if the funds were re-routed rather than a cybercriminal impersonating another individual (identify theft).
With so much at stake for everyone involved in real estate transactions today, it’s very important that title companies place just as much emphasis on their reaction plan to fraud as they do their preventative measures.
With the increasing amount of information available online and the evolving sophistication of fraud schemes, it’s crucial that title companies stay up to date on best practices for fraud prevention. Cybercriminals are constantly evolving and adapting the techniques they use to gain access to confidential information in order to commit fraud. It’s time the title and real estate industry leveraged the latest advanced technologies combat fraud and update their fraud response plan to help law enforcement stop fraudsters.
With the increasing amount of information available online and the evolving sophistication of fraud schemes, it’s crucial that title companies stay up to date on best practices for fraud prevention. But you don’t have to do it alone; we’re here to help. In fact, it’s why we created our industry-leading wire fraud prevention software, SafeWire. Schedule a free in-depth demo of the platform today.