CertifID Raises $20 Million to Combat Real Estate Wire Fraud

CertifID, funding, investments, fraud prevention

Wire fraud prevention company CertifID has raised $20 million in a Series B funding round.

The financing, announced Tuesday (Sept. 12), will help the Texas-based firm develop fraud prevention products for the real estate industry, which is facing a sharp uptick in fraud.

“Despite the cyclical nature of the housing market, fraud against real estate transactions has grown exponentially,” CerfifID said in a news release. “The FBI reports that the real estate sector experienced a 72% surge in business email compromise (one of the most common tactics used in wire fraud) from 2020 to 2022.”

As PYMNTS has noted, 71% of victims of payment fraud have been impacted by this method, in which fraudsters pose as a company’s supplier and trick accounting teams into paying them instead of their actual vendors. 

According to CertifID, the real estate sector relies chiefly on manual processes to verify banking and identity information — even as it processes trillions of dollars worth of payments each year — giving fraudsters a lucrative pool of victims.

And as noted here last month, the sector, which favors paper checks, is also far behind other industries in its adoption of real-time payments. 

All the same, these companies recognize the benefits of going paperless, with 90% of firms saying they plan to use real-time payments, and 84% saying paper checks could be replaced with a more modern payment method. 

In an interview with PYMNTS earlier this year, Adam Feinstein, vice president of product for payments at AppFolio, discussed the benefits for the sector players in going digital, which may include the adoption of platforms such as real-time payments.

“Online payments processes can help create new efficiencies and uncover cost savings opportunities, increase security to lower fraud incidents and create a more convenient, modern experience for everyone involved,” Feinstein said.  

Elsewhere on the anti-fraud front, PYMNTS spoke with Caitlin Sinclair, director of proposition development and financial crime at GIACT, on the need for businesses to employ a combination of different approaches to thwart fraudsters.

A multi-faceted approach to preventing fraud means embracing technology that harnesses alternative data and adds robust levels of verification beyond just collecting names, addresses and dates of birth, Sinclair said.

She told PYMNTS that behavioral biometrics can help identify users — and can improve transactions, particularly with recurring customers who don’t have to re-enter information every time they want to make a payment on that platform.

“A lot of it,” Sinclair told PYMNTS, “comes down to designing a solution where the types of data that you’re collecting are appropriate for the transaction and the business that you are doing.”