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Fraud is Getting Smarter

By: Merideth Nagel, Esq. June 2, 2023 no comments

Fraud is Getting Smarter

Recently, a Florida law firm experienced a chilling incident that highlights the ever-evolving nature of fraudsters in our industry. The firm was saved by acting on their gut instincts and with the help of technological advancements, they were able to uncover the dark truth behind what first seemed like a normal transaction.

We want to dive into the details of this attempted fraud so that we can shed light on the lessons learned and share some practical advice to help you stay one step ahead of fraudsters.

  1. Thoroughly Scrutinize Documentation and Requests: In the case at hand, a check for $100,000 was received from a buyer claiming to be in Canada, for a commercial cash closing. At first, everything seemed to be routine but after the individual cancelled their deal and requested a refund to a different account, it raised concerns. The buyer’s offer was made without viewing the property and there were no negotiations or direct phone conversations. One red flag after another!
  2. Directly Verify Funds with the Issuing Bank: To ensure the authenticity of the funds, the law firm contacted the issuing bank directly and asked to speak to a live representative instead of relying on the automated system that showed the funds in their account. This crucial step uncovered discrepancies within the check despite the initial confirmation of sufficient funds.
  3. Double-check with Geolocation Tools: To investigate further, an online geolocation tool was employed to determine the location of the buyer’s e-signature. Surprisingly, the tool indicated a different location (Georgia) from the buyer’s claimed residence (Canada).
  4. Use a Verification Service: The law firm also had the advantage of being registered with a specialized verification service called CertifID. During the verification process, it was discovered that the buyer had provided a VOIP (an internet-based) number, and their IP address was hidden behind a VPN, making their true location unknown. Another red flag!

This incident serves as a stark reminder of the evolving nature of financial fraud. Scrutinizing documentation, directly verifying funds with issuing banks, and employing a trustworthy verification service for e-signing are all critical steps to detect and prevent fraudulent transactions. Look for red flags and always trust your gut instincts!

By remaining proactive, we can stay ahead of fraudsters and help safeguard our clients and ourselves in an increasingly digital world.

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