Wire Fraud in Real Estate: Elaborate Email Scams Target Parties to Real Estate Transactions
All parties to real estate transactions should be on alert when it comes to wire fraud in real estate. When you buy a home in Washington, it usually involves wiring money – an earnest money deposit, down payment, or other funds -from one institution to another. Because this can be done remotely according to the financial institution’s instructions, thieves have targeted unsuspecting individuals who simply believe there has been a change in plans. Protect yourself by learning how these sophisticated thieves work, and the tell-tale signs your money may be in jeopardy.
An Undetectable Theft
Email is one of the most commonly used forms of communication in the real estate industry. It is generally thought of as secure and creates incredible availability for all parties to reach each other at lightening speed. However, unscrupulous individuals often hack into and monitor the email exchanges between agents, their clients and escrow officers, and use the involved information to their own advantage.
In most cases, the email of an agent or title officer is cloned and used to send a change of instructions for wiring the funds. This cloning is done expertly, so the threat is practically undetectable. If the buyer follows the new instructions, their money will likely be lost forever, and the buyer’s transaction will fall apart unless they are able to gather additional funds.
Follow these tips to decrease your chances of becoming a victim of wire fraud in real estate:
- These schemes are incredibly elaborate, and will often include fake emails, fake signatures, and fake web pages, all in an attempt to get you to trust the source and follow the new wiring instructions. Do not try to contact an agent to verify the new information using these sources, as they are all designed to funnel you into a certain situation.
- Never send sensitive information using un-encrypted email.
- Ensure all parties to your transaction are aware of the possibility of wire fraud. Attorneys, escrow agents, buyers, sellers, real estate agents, and title agents have all been targeted in these scams.
- Prior to following ANY changes in wiring instructions, the person sending the money should call the intended recipient to ensure that the wiring instructions are correct. This should only be done using a verified phone number.
- If an email indicates a change in wiring instructions, do not use that email to verify the agent’s or officer’s contact information. Use a separate, trusted source, such as The NAR’s agent search function, to find the correct, verified information.
- Do not click on any unverified email links. They may contain viruses or spyware in addition to taking you to fraudulent websites or portals.
- Only use secured wifi for all of your transaction-related communications.
- Enable an updated firewall and anti-virus program for all your personal and business devices.
- Never ignore your instincts. If something feels off, independently verify the information before taking any action.
- Frequently change your usernames and passwords, and keep each username and password specific for one use only. Make all passwords complicated.
Dealing with the Aftermath
If you think you may have been the victim of wire fraud in real estate, it is essential to act quickly by taking the following steps:
Call all banks or financial institutions involved to put an immediate stop to the wire.
Report the incident to the police.
Contact all parties to the transaction who may have been exposed to the attack and warn them of the possibility of further attacks.
Change all usernames, passwords and other identifying information associated with any compromised accounts.
Contact the Federal Bureau of Investigation’s Internet Crime Complaint Center and report all fraudulent activity.
The NAR further states:
“This advice is not all-inclusive, and real estate practitioners should work with Information Technology and cybersecurity professionals to ensure that their e-mail accounts, online systems, and business practices are as secure and up-to-date as possible.
Be aware that these emails are extremely convincing. Many sophisticated parties have been duped. No one should assume that they are “too savvy” to recognize the fraud. In addition, no one should assume that they are “too small a target” to be on these criminals’ radars. This fraud is pervasive, convincing, and constantly evolving.”
If you are a party to a real estate transaction, you should be aware of the possibility of wire fraud in real estate. Follow these simple tips, do not become complacent, and you are more likely to have a smooth transaction and close without incident. Contact a member of The Hughes Team with any questions you may have on this topic, or for a more detailed explanation of ways to protect yourself and your assets.