Cybercrime / Wire Fraud is a growing potential threat in real estate

Cybercrime / Wire Fraud is a growing potential threat in real estate transactions. Criminals have hacked email accounts of real estate agents lenders, escrow agents, closing attorneys, etc - - anyone involved in the transactions.

Here are a couple of examples from the news:

From the Samford Advocate:

A Samford resident was trying to buy a home through a real estate agent, but a criminal had somehow infiltrated their email conversation and tricked the resident into wiring $426,000 to a fraudulent account.

Luckily in this case, the funds involved were frozen and recovered by the victim within days - but they could have lost over $400,000.

In Chicago:

A buyer was prepared to pay a $40,000 down payment on a home. They spoke with a paralegal for the transaction, who said they'd send the wire instructions the following week.

But that same day, the buyer got an email from who they thought was the same paralegal. The email said the money needed to be wired sooner than expected. It included the correct down payment amount, address of the new home, and her mortgage commitment document.

The buyer went to the bank and sent the $40,000.

The following Monday, the home buyer got a call from the attorney's paralegal asking about the down payment of the home. The buyer said they’d already sent it according to the email, and the paralegal said - - what email, I didn't send any email.

After taking a closer look at the email, the buyer realized the sender's address was similar to the paralegal's, but had two extra letters added to it.

They lost their down payment that they had saved for years for.

Using email, hackers have used fraudulent wiring instructions to direct parties to wire funds to the criminals' bank accounts, often to off-shore accounts, with little chance of recovery.

It also appears that some hackers have provided false phone numbers for verifying the wiring instructions.

In those cases, the buyers called the number provided to confirm the instructions, and then unwittingly authorized a transfer to somewhere other than the escrow agent.

Sellers also have had their sales proceeds taken through similar schemes.

So let’s go over some things to be aware of to avoid being a victim:

A real estate agent should never send wiring instructions to you by e-mail. In most cases, they won’t do it at all. Instructions should come from the lender or closing attorney. Be skeptical if this happens.

Get the phone number of the closing attorney or escrow agent at the beginning of the transactions. Confirm it independently by doing an internet search on the attorney's office. Call and talk to them.

Always call the verified number to orally confirm wire instructions. Be alert for the smallest change to anything you received by email. Confirm the bank routing number, account numbers and other codes before taking steps to transfer the funds.

Avoid sending sensitive personal information in emails or texts. Provide such information in person or over the telephone directly to the Escrow Officer.

If you haven’t done it already, take steps to secure the system you’re using with your email account. These steps include creating strong passwords and using secure WiFi as well as two-step verification

processes.

If an email or a telephone call seems suspicious refrain from taking any action until the communication has been independently verified. Promptly notify your bank, your real estate agent and the Escrow Officer.

Be Alert. Be skeptical. Be aware.