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GRAND RAPIDS — Led by Rise in Fraud and Cybercrime Certif ID LLC Introducing a new service designed to protect loan repayments in real estate transactions.
Based in Grand Rapids and Austin, Texas, CertifID launched PayoffProtect in response to client requests for more protection when making loan repayments electronically. The service verifies the identity of mortgage lenders and other parties, authenticates payoff instructions, and verifies that information shared by parties to a transaction is accurate.
CertifID co-founder and CEO Tyler Adams said:
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PayoffProtect builds on the service CertifID launched four years ago to provide real-time protection and prevent wire transfer fraud in real estate transactions.
CertifID co-founder and CEO Tyler Adams said: “CertifID as a platform is focused on ensuring that the movement of money from the buyer to the title company (and) from the title company to the seller is completely secure, and each party involved in the transaction What we learned in the early days of launching the product is that there are money movements that you need to spend time and focus on and that It was in return for the lender.”
The cybercrime that CertifID seeks to prevent with PayoffProtect occurs when cybercriminals can impersonate lenders in real estate transactions and redirect funds for the purpose of repaying outstanding debts. According to the National Association of Realtors, this typically involves cybercriminals identifying pending transactions and hacking into either party’s email her account to send fake wire transfer instructions and intercept payments. Occurs when enabled.
Fraudsters know that real estate deals involve a “huge pool of money” to pay off outstanding mortgages, Adams said. They target title companies by emailing or faxing bogus instructions to direct money to fraudulent accounts, he said.
Today’s cybercriminals are highly organized and sophisticated operators with the ability to create fake email domains, signatures and web pages. They “look almost exactly like small-town mortgage lenders, to the point where title companies can’t tell the difference. The difference between real and fake,” Adams said. “They are standing up to organized crime.”
Citing the need to better secure wire transactions and the growing threat of cybercrime, Adams said CertifID’s recovery services team had been the victim of mortgage payment fraud in the past 12 to 18 months. He cites how he recovered $50 million for a customer who was harassed. “We hear stories like that every week,” he said, referring to the recent case where the title company was bought for his $1.7 million.
Adams founded CertifID in 2017 with business partners Thomas Cronkright II and Lawrence Duthler. The company said he fell victim to a social engineering scam in 2015 that resulted in a wire fraud costing nearly $200,000.
CertifID launched PayoffProtect in early August in support of a $12.5 million Series A growth capital round with Minneapolis-based Arthur Ventures and completed last spring. Adams said the company’s first beta test the new service with three title companies, and so far he’s secured more than $750 million in mortgage payments.
The FBI’s annual report on cybercrime does not categorize reported incidents specifically related to mortgage payments, but 19,954 incidents were reported in the United States in 2021, categorized as business email compromises. It shows $2.39 billion in losses due to fraud, including compromised email accounts. That compares to his $1.86 billion in 2020, which includes 19,369 reported incidents.
Phishing scams that compromise business emails are a major type of scam that often target electronic real estate mortgage payments that parties communicate for the first time, Adams said. The FBI noted that there were about 324,000 complaints about phishing scams in 2021, costing victims $44.2 million in damages. The number of phishing scams has nearly tripled since 2019.
According to Adams, the real estate industry remains the number one target for phishing scams. Email Once his account is compromised, cybercriminals are “just listening” and can track down the parties to the transaction and attack and redirect wire transfers for mortgage repayment. said he.
“These underworld gangs believe that if they want to make a lot of money in targeted transactions, they are after real estate that is big money and that is fully open to everyone from a public perspective.” You can find out who the real estate agent is for a multi-million dollar property in any town in Michigan,” Adams said. “This all makes for a really fruitful breeding ground for these scammers who target everyone involved in real estate transactions.”
The FBI’s Internet Crime Report lists 11,578 incidents in 2021. This included loss of funds from real estate investments or fraud related to rental or timeshare properties, which cost the victim $350.3 million.
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