The importance of protecting assets against financial fraud
Mar 31st, 2022 | By Jennifer Ashton
In recent years, financial fraud has increased at an alarming rate across Canada and globally. The world has evolved to be increasingly digital which has enabled all levels of fraud to reach a broader and larger scale.
While we have largely benefited from the speed of digital adoption with accessibility and ease of technology, these benefits can also bring risks as fraudsters and cybercriminals are becoming more and more sophisticated. As such, it has become essential for all real estate stakeholders—including professionals, homebuyers and sellers alike—to remain vigilant to ensure that financial vulnerabilities are identified and mitigated before financial fraud occurs.
The shift caused by technology
From identity verification to the automation of processes, technology has helped to greatly advance the real estate industry and financial services space overall. However, the more processes are simplified and the more reliant they become on technology, the higher the risk that fraudsters can figure out how to exploit them.
That being said, technology has also played a core role in helping detect fraud—from monitoring spending patterns to ensuring payments are protected. As we look to automate future transactions, technology will continue to play a key role in allowing for the safe transfer of funds. As technology continues to advance and change the payments industry, we have an opportunity to build on existing secure solutions by adding seamless innovative layers of fraud detection intelligence to increase protection measures and reduce risk for our customers. Strategic collaboration with financial institutions and payment partners brings benefits and further advancements as more information and data collected on fraud leads to more efficient methods of detection.
Taking steps to protect your assets
While technology will play a key role in detecting fraud and protecting payments, it’s also important that homebuyers take steps to protect their assets. There are several ways to be proactive about this. Fundamentally, they should be cautious when sharing financial information. Another essential step to being proactive is to identify relevant risks. For example, if they are working remotely or conducting virtual banking from a coffee shop or local library, the Wi-Fi network may not be secure. There could also be fraudulent public hotspot networks set up with names that sound legitimate but are malicious, causing data and privacy to become vulnerable.
The same rules apply to other stakeholders across the transaction. All parties have a responsibility to ensure they are on protected networks when sending or receiving financial information. Those coaching homebuyers through the transaction process also have a responsibility to ensure they understand the importance of this.
From a homebuyer’s perspective, one of the best forms of protection is a title insurance policy. Title fraud typically occurs when a fraudster obtains the title to a property through a fraudulent transfer document, usually through identity theft. To protect against this, it’s important for the homebuyer to ensure they understand how to protect their identity by being cautious about what type of personal information they share and where they share it. For example, they should be extra careful with what they share on social media and should be proactive in protecting themselves and their financial information through methods like credit report monitoring. Additionally, working with credible professionals to review all mortgage documents before submission is an effective way to ensure nothing looks suspicious.
All homebuyers will benefit from being skeptical about all asks and transactions that have to do with their assets. Fundamentally, it is important to trust their instincts. If there is unnecessary urgency, forcefulness or if the ask is unexpected and seems out of place, question the legitimacy and proceed with extreme caution. If they feel something is off, it probably is!
Challenges facing the real estate industry
While the real estate industry has created many innovative solutions in recent years to combat fraud, legacy processes, systems and budget constraints can still inhibit the progress of fighting fraud today. Organizations will benefit from employing collaborative innovation by working with experts to combat fraud while improving the customer experience along the way. Working with fraud prevention experts will ensure they can provide customers with the transformational and secure solutions they need to be successful and remain safe.
At FCT, we take financial fraud very seriously. We are the only title insurer in Canada with in-house Certified Fraud Examiners (CFEs) on staff. They specialize in early detection and protection to ensure that our customers, partners and employees are always keeping fraud prevention top-of-mind.
We also provide a multitude of products and solutions available to actively protect our customers from fraud such as Errors and Omissions, Commercial and Residential Title Insurance and SureFund. Additionally, our team is available to provide expert advice at any time to anyone who might be unsure about a transaction. With decades of industry-leading experience, we have it covered.
Insurance by FCT Insurance Company Ltd., with the exception of commercial policies. Subject to certain exceptions, commercial title insurance policies equal or below $10M CAD are provided by FCT Insurance Company Ltd. Commercial title insurance policies above $10M CAD are provided by First American Title Insurance Company. Services by First Canadian Title Company Limited. The services company does not provide insurance products. This material is intended to provide general information only. For specific coverage and exclusions, refer to the applicable policy. Copies are available upon request. Some products/services may vary by province. Prices and products/services offered are subject to change without notice.
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