A number of software companies have taken on the fight against real estate wire fraud, and with a fresh round of Series A funding to the tune of $12.5 million, technology CertifID is even more prepared for battle.
Real estate wire fraud is one of the fastest growing crimes in the country, evidenced by a 42 percent increase between 2018 and 2020, the Federal Bureau of Investigation told Chicago’s ABC 7.
It’s not a crime solely victimizing naive, overly excited home buyers and sellers, either.
Real estate agent, lawyer and Inman contributor Rich Hopen lost his mortgage payoff of $239,000. From earnest money deposits to payoffs, untold millions in home-related savings are at risk with every deal done.
A number of software companies have taken on the fight against real estate wire fraud, and with a fresh round of Series A funding to the tune of $12.5 million, technology company CertifID is prepared to take the battle up a notch.
The funding was led by Arthur Ventures, a Minneapolis-based growth equity firm. Money is slated for hiring and augmenting retention efforts, according to a statement by Tyler Adams, co-founder and CEO of CertifID.
The business world’s goals to evolve into digital deal-making can distract consumers from the inherent risks of moving large sums of money, he also said. The emotions entwined in a real estate deal often complicate matters.
“Fraud is at an all-time high as global criminal networks prey on the shift to virtual communications and electronic transfers ignited during the COVID-19 pandemic,” Adams said. “This investment will enable us to significantly expand our reach as we look to protect every real estate transaction.”
Last year, the FBI reported $2.4 billion in losses due to Business Email Compromise (BEC), a scheme where cyber criminals use social engineering techniques to initiate fraudulent wire transfers, CertifID said.
CertifID’s technology emphasizes identity verification and account security. An Inman review of the product stated that parties have “to answer a number of out-of-wallet questions — inquiries that can’t be answered with information found on a person’s credit card, license or any other common form of personal ID.”
The process involves a sequence of security protocols designed to verify an individual’s identity through a browser-level session. Users will be sent a new access code each time they need to interact with an account. The company offers a $1 million insurance policy on every transaction it facilitates.
The company claims to have protected more than $150 billion in transactions since its 2017 inception, spurred by its founders’ Michigan title company, Sun Title, being victim of a $200,000 wire fraud incident. Adams’ co-founders are Thomas Cronkright II and Lawrence Duthler.
“Our team of incredibly talented people has seen firsthand the devastating impact of wire fraud, which drives everyone to work to prevent it,” Cronkright said. “We look forward to continuing to dedicate ourselves towards a world where businesses and consumers can make electronic payments without the fear of loss.”
CertifID also works alongside the U.S. Secret Service to help wire fraud victims recover funds. To date, they’ve worked with more than 190 victims to get back close to $50 million.