New Jersey regulator cautions mortgage industry against wire transfer fraud

by Francis Monfort13 Apr 2018

A New Jersey regulator has issued a warning to mortgage industry players in the state to remind participants of the prevalence of fraudulent schemes in wire transfers.

Marlene Caride, Acting Commissioner of the Department of Banking and Insurance, said in the bulletin that the industries addressed handle millions of dollars in wire transfers every day in connection with mortgage loan transactions in the state.

According to the bulletin, wire transfer fraud schemes usually involve techniques to compromise business emails by changing normal wiring instructions to divert funds from the intended recipient to a stranger. These schemes may use social engineering or computer intrusion techniques, such as malware and phishing.

The department recommended that mortgage professionals use extreme care when communicating wire transfer instructions electronically and ensure that any third-party service providers are extremely careful. Mortgage professionals should also inform other legitimate parties to the transaction about applicable precautions.

The bulletin provided a list of precautions to make mortgage companies harder to target, including closely verifying email addresses before using them; avoiding web-based email; strictly following specific business procedures for confirming the validity of changes made to wire transfer instructions; and using a confirmation process, which may include verbal communication via a mutually agreed telephone number between the known parties.


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