November 12, 2025  

CLOSING PROTECTION LETTER WIRE FRAUD PROCEDURES

Iowa Title Guaranty (“ITG”) recognizes that it is vital for Closing Protection Letter (“CPL”) participants to have detailed written wire fraud prevention and wire fraud response procedures in place. Therefore, to assist CPL participants in establishing written procedures, ITG has compiled the following wire fraud prevention and response procedures that align with American Land Title Association (“ALTA”) best practices.

WIRE FRAUD PREVENTION PROCEDURES

Preventative measures for protection from wire fraud in a real estate transaction are twofold.

The first preventive measure is an incoming wire procedure to alert the consumer about the dangers of wire fraud and to provide clear instructions to follow when wiring funds to the closing agent.

A simple yet effective way to alert the consumer is by adding a wire fraud warning to your email signature. The National Association of Realtors® provides the following example:

IMPORTANT WIRE FRAUD NOTICE: Never trust wiring instructions sent via email. Cyber criminals are hacking email accounts and sending emails with fake wiring instructions. These emails are convincing and sophisticated. Always independently confirm wiring instructions in person or via a telephone call to a trusted and verified phone number. Never wire money without double-checking that the wiring instructions are correct.

Another effective way to alert the consumer is to provide them with the following rack card supplied by ALTA: Protect Your Money From Closing Scams.

The second preventative measure is for the settlement agent to implement an outgoing wire procedure which includes a written verification form to complete and retain for each outgoing wire. At a minimum, the written procedure must include (1) verification of the initial receipt of the wire instructions, (2) independent verification of the wire instructions, and (3) verification of receipt of the wired funds.

Retaining this written information is necessary because it will be critical in the recovery process in the event wire fraud still occurs.

ALTA's Information Security Committee developed the following outgoing wire preparation checklist to assist in meeting best practices: ALTA Outgoing Wire Preparation Checklist.

To reinforce the outgoing wire procedure, ITG recommends, but does not require, that you utilize a professional wire fraud prevention and recovery service.

WIRE FRAUD RESPONSE PROCEDURES

When a suspected wire fraud occurs, the ability to recover lost funds largely depends on the timing of the response. The quicker the response, the greater the odds of recovery. This is why it is crucial to have an established written fraud response procedure in place.

At a minimum, the procedure must include:

Contact the Banks:

Immediately notify your bank and the receiving bank, requesting a "fraud freeze" and a SWIFT recall to halt the transfer.

Seek Professional Help:

Immediately notify Iowa Title Guaranty and engage your professional wire fraud recovery service.

Report to Law Enforcement:

File a report with the FBI's Internet Crime Complaint Center (IC3) and your local law enforcement.

Collect Documentation:

Gather all emails, transaction records, and communications related to the fraud.

Follow Up and Be Vigilant:

Continuously monitor the situation and be proactive in following up with the bank and law enforcement.

Internal Assessment:

Conduct an audit of your incoming and outgoing wire procedures to understand how fraud occurred.

ALTA's Information Security Committee developed the following rapid response worksheet to assist in fraud recovery: ALTA Rapid Response Worksheet.

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