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How to Prevent Wire Fraud

Jun 5, 2019

By Tom Cronkright, Co-founder and CEO of CertifID

Preventing wire fraud essentially comes down to three things:
• Educating transaction participants about the threat of fraud and what to watch out for;
• Preventing fraudsters from accessing email and other communication-based accounts to obtain critical information about a transaction; and
• Ensuring parties have accurate, uncompromised wiring information and contact details for the person or entity that will be receiving funds via wire transfer.

An important step in wire fraud prevention is to stop fraudsters from gaining access to transaction-level information required to run a scam. Here are six strategies that may lower the risk of breach and loss for you and your customers:

1. Limit Publicly Available Information
Running a business requires that certain information be shared about your company. However, there are things you can do to protect some of the more sensitive data about your organization and employees.

2. Use Strong Spam Filters
Preventing phishing emails being seen is the best way to stop employees from falling for them. A strong email filter is one of the best ways to do this. Products like Mimecast and Spam Bully provide solutions that block and filter phishing emails.

If criminals can’t get their emails in front of your employees, then it will be far harder for them to steal account details and, ultimately, hit someone in your organization with wire fraud.

3. Phish Your Employees
Spam filters aren’t always enough. This is why many forward-thinking businesses are hiring third-party companies to perform phishing testing on their employees.

They simply create a phishing email, send it to your staff, and then see who falls for it and what credentials are given. This provides a starting point for training and awareness and gives them the education needed to avoid making the same mistake in the future.

We recommend taking advantage of Google‘s phishing test. It provides a great set of emails meant to educate you and your employees on how to identify phishing versus legitimate emails.

4. Real-Time System Monitoring
Perimeter security helps keep your organization’s entire network threat-free. It utilizes features such as a firewall, web-content filtering, malware protection, and geolocation blocking to keep your network safe in real time.

By monitoring all web activity that enters and exits the network, perimeter security is able to identify unusual patterns or abnormal behavior on your network that could be a sign you are under attack and take action to stop it.

5. Secure Your Accounts with Strong Passwords and Two-Factor Authentication
Another step you can take is to secure accounts with two-factor authentication (2FA). Accounts that use 2FA require an extra piece of information on top of a username and password to log in.

This additional bit of information is something that only the account owner has access to and it usually has a physical element. For example, it could be a code, sent to an app on the user’s phone, virtual private networks that are tethered to each company device, or a physical key like Yubi Keys. It could even be an SMS message or an actual key.

Essentially, it means that even if a hacker knows an account’s username and password, they will be unable to log into the account without also having access to the third authentication detail.

One final thing you can do regarding 2FA is to educate your customers and referral partners about the benefits of turning it on.

6. Always Verify The Person You’re Doing Business With
Wire fraud is a symptom of the lack of proper identity verification at critical points in a transaction. The success rate of wire fraud scams is due to the exploitation of a trusted relationship between two parties. If identities are confirmed properly, that trust is never breached.

Some things you can do to help verify information include:
• Gather and share contact information early in the transaction cycle
• Have a process for sending and receiving wire transfers
• Educate customers and staff about what a scam looks like
• Authenticate wiring details and identity

For a comprehensive guide to real estate wire fraud and how to prevent it, see CertifID’s eBook that was recently released, titled: “Clear to Close – The Complete Guide to Understanding and Preventing Real Estate Wire Fraud” (https://certifid.com/complete-guide-to-real-estate-wire-fraud/).

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