CHCP Wire Transfer & Fraud Prevention 5 — Questions and Answers
Question 1: Which organization operates the IC3 (Internet Crime Complaint Center) where wire fraud victims should file reports?
- FinCEN
- The FBI (Correct answer)
- The Consumer Financial Protection Bureau (CFPB)
- The Secret Service
Correct answer: The FBI
The FBI operates IC3, which accepts online complaints about internet-enabled crime including real estate wire fraud, and coordinates with law enforcement on recovery efforts.
Question 2: A title company's written information security plan (WISP) should be reviewed and updated at minimum:
- Every five years
- Only when a breach occurs
- Annually or whenever significant operational changes occur (Correct answer)
- Every month
Correct answer: Annually or whenever significant operational changes occur
Best practices and many state regulations require annual WISP reviews and updates whenever significant technology, personnel, or process changes affect the security environment.
Question 3: A fraudster sends a buyer an email with a PDF attachment containing 'official' closing wire instructions. The PDF appears to come from the title company. What best practice would have prevented this attack?
- Using antivirus software to scan the PDF
- Establishing a policy that wire instructions are only valid when verbally confirmed via a known phone number (Correct answer)
- Requiring the buyer to pick up instructions in person
- Sending all closing documents by overnight mail instead
Correct answer: Establishing a policy that wire instructions are only valid when verbally confirmed via a known phone number
A firm policy that wire instructions must be verbally confirmed via a pre-established phone number eliminates the risk of fraudulent emailed PDFs being acted upon.
Question 4: Which party bears primary legal responsibility for funds wired to a fraudulent account due to unverified email instructions?
- The receiving bank that accepted the fraudulent wire
- Typically the party that relied on unverified instructions, as liability varies by state and circumstances (Correct answer)
- Always the title insurance company
- Always the buyer's real estate agent
Correct answer: Typically the party that relied on unverified instructions, as liability varies by state and circumstances
Liability for wire fraud losses is complex and fact-specific; courts often assign responsibility to the party that failed to verify instructions, though outcomes vary significantly by jurisdiction.
Question 5: Multi-factor authentication (MFA) on email accounts used by closing professionals is important primarily because:
- It speeds up the wire transfer process
- It prevents unauthorized access even if login credentials are compromised (Correct answer)
- It is required by RESPA for all settlement agents
- It encrypts wire instructions automatically
Correct answer: It prevents unauthorized access even if login credentials are compromised
MFA adds a second verification layer so that stolen passwords alone cannot grant criminals access to email accounts, reducing the risk of account takeover used in BEC fraud.
Question 6: The FBI's Recovery Asset Team (RAT) assists in wire fraud cases by:
- Prosecuting fraudsters in federal court
- Coordinating rapid financial institution freezes to recover fraudulently transferred funds (Correct answer)
- Reimbursing victims from a federal fraud recovery fund
- Issuing subpoenas to foreign banks holding stolen funds
Correct answer: Coordinating rapid financial institution freezes to recover fraudulently transferred funds
The FBI RAT works with financial institutions to freeze and recover wire fraud proceeds quickly, operating through the Financial Fraud Kill Chain (FFKC) process.
Question 7: Which closing document change should ALWAYS trigger a re-verification call to confirm wire instructions before funds are sent?
- Any change in the closing date
- Any modification to the wiring bank name, account number, or routing number (Correct answer)
- A change in the buyer's real estate agent
- An update to the property legal description
Correct answer: Any modification to the wiring bank name, account number, or routing number
Any change to banking details — including bank name, routing number, or account number — is a critical red flag that requires immediate out-of-band verification before funds are sent.
CHCP Wire Transfer & Fraud Prevention 5
Which organization operates the IC3 (Internet Crime Complaint Center) where wire fraud victims should file reports?