CUNA Mutual Group Issues RISK Alert Regarding Wire Fraud Schemes

CUs and their members are being targeted in wire transfer fraud schemes aiming to steal real estate transaction closing funds.

JMFA Thumbdownload 3These types of scams begin with a scammer hacking title company and/or closing agent email accounts and searching for upcoming closings. Upon finding one, the scammer sends a spoofed email containing “updated wire instructions” to the credit union/lender or the member/purchaser.

Member/purchasers are particularly vulnerable if they are using their own funds for closing. If they wire their personal funds for the closing using the fraudulent wire instructions, they may try to hold the credit union liable if the wire cannot be retrieved.

Credit unions should consider these risk mitigation tips:

• Ensure wire transfer agreements and wire transfer request forms disclose how
wires settle at beneficiary banks. 
• Avoid using electronic wire transfer agreements and request forms that are esigned.
• Train frontline staff so they can warn members on this scam when members
request a wire for a real estate closing. 
• If the credit union’s loan department receives an email purportedly from a title
company/closing agent containing updated wire instructions for member loan
closings, verify the instructions by calling the title company/closing agent using
a reliable phone number.

You can read the Full Alert here.