Real Estate Wire Fraud is on the Rise

Buyers and Sellers Beware of Wire Fraud

Wire fraud thieves are increasingly targeting real estate transactions. Real estate transactions are an attraction to thieves because of the large sums that are exchanged in deposits and downpayments, as well as loan pay-off’s. By 2019, cybercrime will cost businesses an estimated $2 trillion annually. Real Estate wire fraud is on the rise.

The real estate transaction has become more complicated over the years, and having a REALTOR as a trusted adviser is crucial. While technology has minimized some of the complications of a real estate transaction, in some ways, home buyers and sellers are increasingly at risk. A lot of personal data is available and at risk. While the real estate industry is attuned and has employed data security protocols and practices, it behooves buyers and sellers, as well as real estate agents, to be aware of cyber crime. A lot of crime can be averted with personal safety procedures.

How Cyber Thieves Work Their Crime

Wire fraud thieves have several techniques. The one we see so often stems from fraudulent emails. Because the email looks legitimate, the unsuspecting target opens the email and clicks on a link or two. These emails are convincing and sophisticated. Unfortunately, they’ve just provided the hacker access to the e-mail account. Then, the hacker logs into the e-mail, unknown to anyone, and monitors messages regarding the real estate transaction. They target buyers, sellers, real estate agents, lenders and title company personnel.

Also, the hacker routinely monitors MLS and other public sources for the information. Once a sale in process is discovered, the thief waits for incoming or outgoing wiring instructions, intercepts the e-mail, and using either your e-mail account or a very similar fake e-mail account, changes the wiring instructions to direct funds to their own account. The thief directs that the wire transfer is “urgent” to get the Title Company (or in other cases, the Buyer) to act quickly and without examining the e-mail and instructions carefully.

Last year in Montgomery County, Maryland, cyber hackers successfully intercepted and changed a buyer’s wiring instructions, causing the buyer to wire approximately One Hundred Fifty Thousand Dollars ($150,000.00) to the thief’s bank account. Once it was discovered, the money was long gone. It had already been re-routed to a bank account in China. The Buyer never recovered the stolen funds.

If the unthinkable happens, contact the bank immediately and try to stop the funds. Notify all parties involved that may be affected. Contact the local police and report the incident to the FBI Internet Crime Complaint Center. REALTORS should also report it to the local REALTOR Association.

Once money is sent to a cyber thief, the chances of getting it back are slim. Taking a few smart steps before your settlement can significantly lower your chances of becoming pray to wire fraud thieves.

How to Prevent Wire Fraud

The most foolproof way to avoid a cyber attack is to not send financial information electronically, and instead, require handwritten, notary acknowledged instructions.

If you receive any emails with wiring instructions before your settlement, pick up the phone and call your settlement company. Verbal and personal confirmations are crucial. This is one time when suspicion is a virtue. Be suspicious of all e-mails related to wire, funding, deposits or payments related to a transaction is best.

E-mail is the number one source of the problems. Never send sensitive information via email. If you must, make sure to use encrypted email. Follow theses safe e-mail tips:

• DON’T click on links. If you feel like it might be valid, copy the link and paste it into an incognito browser window.
• If an email looks suspicious, don’t reply to it. Mark it as phishing, then delete it.
• Use strong passwords and change your passwords regularly.
• Don’t use the same password for all of your sign-in’s. (social media, email, websites, memberships, etc.) Once a hacker gets one of them, it’s that much easier to hack into your email.
• Implement a double sign in for your emails and any other accounts when available.
• Don’t use free wifi to transact business.

We hope none of our real estate clients ever face wire fraud. We only partner with title companies and lenders who practice the highest safety protocols when it comes to our client’s financial well-being. If you or anyone you know have questions regarding your financial safety during a real estate transaction, call you title company, lender or REALTOR, and make sure you are satisfied with the answers.

Contact Us for Further Information. 301-401-5119