CHCP Wire Transfer & Fraud Prevention 2 — Questions and Answers
Question 1: A buyer receives an email from what appears to be their settlement agent with updated wire instructions the day before closing. What should the buyer do?
- Wire the funds immediately to meet the closing deadline
- Call the settlement agent using a phone number from the original contract or company website to verify (Correct answer)
- Reply to the email asking for confirmation
- Forward the email to their real estate agent for approval
Correct answer: Call the settlement agent using a phone number from the original contract or company website to verify
Buyers must verify any wire instruction changes by calling a known, independently verified phone number — never by responding to the suspicious email.
Question 2: Which red flag is most commonly associated with Business Email Compromise (BEC) in real estate transactions?
- Wire instructions sent via certified mail
- Last-minute changes to wire instructions received by email (Correct answer)
- The settlement agent requesting funds 48 hours early
- The lender providing payoff figures in writing
Correct answer: Last-minute changes to wire instructions received by email
BEC fraud typically involves fraudulent emails containing last-minute wire instruction changes designed to redirect funds to criminal accounts.
Question 3: What does the term 'positive pay' refer to in the context of preventing wire fraud?
- A government program reimbursing fraud victims
- A bank service that matches issued checks or wires against an authorized list before processing (Correct answer)
- A closing fee paid to confirm fund receipt
- A buyer's deposit held in escrow
Correct answer: A bank service that matches issued checks or wires against an authorized list before processing
Positive pay is a bank fraud-prevention service that requires companies to pre-authorize transactions, flagging mismatches for review before funds are released.
Question 4: Under FinCEN's Geographic Targeting Orders (GTOs), certain all-cash residential purchases require title companies to report the beneficial owner when the purchase price exceeds what threshold in high-risk metros?
- $100,000
- $300,000 (Correct answer)
- $1,000,000
- $5,000,000
Correct answer: $300,000
FinCEN GTOs generally require reporting for all-cash purchases above $300,000 in designated high-risk metropolitan areas, though thresholds can vary by order.
Question 5: A closing professional discovers a wire of $250,000 was sent to a fraudulent account. What is the FIRST action they should take?
- Notify the state insurance commissioner
- Contact the sending bank immediately to initiate a wire recall (Correct answer)
- File a SAR with FinCEN within 30 days
- Inform the parties the closing cannot proceed
Correct answer: Contact the sending bank immediately to initiate a wire recall
Time is critical — contacting the originating bank immediately to initiate a recall (SWIFT recall or domestic SWIFT recall) offers the best chance of recovering misdirected funds.
Question 6: Which type of fraud involves criminals hacking into a real estate professional's email account and monitoring communications before striking?
- Phishing
- Vishing
- Email account takeover (ATO) (Correct answer)
- Smishing
Correct answer: Email account takeover (ATO)
Account takeover fraud involves criminals gaining full access to an email account, silently monitoring deal communications, and inserting fraudulent instructions at the optimal moment.
Question 7: What is the recommended best practice for transmitting wire instructions to a buyer?
- Send via encrypted email attachment
- Use only the email thread already established with the buyer
- Deliver instructions in person or by phone with verbal confirmation, supplemented by encrypted delivery (Correct answer)
- Post instructions in the transaction management platform chat
Correct answer: Deliver instructions in person or by phone with verbal confirmation, supplemented by encrypted delivery
Delivering wire instructions in person or verbally with a follow-up encrypted document minimizes the risk of interception compared to unencrypted email alone.
CHCP Wire Transfer & Fraud Prevention 2
A buyer receives an email from what appears to be their settlement agent with updated wire instructions the day before closing.
What should the buyer do?