“The money is not there!” These are words no real estate seller, purchaser, agent, broker or title company ever wants to hear after a wire transfer. But as wire fraud schemes become more prevalent, these words are becoming a recurring nightmare throughout the real estate industry, and the legal aftermath of these schemes may implicate everyone involved in the transaction.
Here’s how these wire fraud schemes work.
First, hackers gain access through the email of a buyer/seller involved in a real estate transaction. They monitor the emails as they go back and forth, and then determine who may be requested or has been requested to send funds. Then, mimicking the realtor’s or title company’s email address, they send the buyer a message requesting that they change the payment type (from a check to a wire transfer) or change the recipient to a different account (one under their control). Then your money is gone.
Three Clichés to Prevent Wire Fraud
At Powers Premiere, we understand that fraudsters will always find a way to make chaos. It’s what they do. At the moment, one of their favored targets is real estate transactions. A shocking report produced by the FBI found that wire fraud attacks targeting real estate transactions increased 480% in 2016.
With these kinds of attacks not slowing down, it’s imperative that everyone be responsible and remain vigilant. As Smokey Bear would say: “Only you can prevent forest fires.”
We’ve used that cliché, plus two others, to try and bring buyers into the fold so they can join us in protecting their money from wire fraud. Real estate professionals, title companies, realtors, lenders, we hope you will share this with buyers, sellers and colleagues!
1. It’s 3 a.m. Do you know where your children are?
The question is not where are your children, it’s where are your funds for closing? For too many real estate buyers it’s in the account of a fraudster.
2. Look both ways before you cross the street
You heard it a thousand times as a kid: “Look both ways before you cross the street, or you’ll get hit by a car.” The same is true of wire fraud. Real estate transactions are particularly vulnerable.
If you don’t verify your wiring instructions, your closing funds may end up somewhere they’re not supposed to be – like Nigeria, Albania or the Ukraine in the account of the hacker who just pretended they were your realtor. Once you hit ‘send’, there’s no hopping in that DeLorean and travelling back in time to ‘recall’ your message. And now the funds are gone.
3. Only you can prevent forest fires
Remember Smokey Bear? He was big on personal responsibility. He said, “Only you can prevent forest fires.” That kernel of wisdom is also true of wire fraud. In the age of the internet, identity theft is an unfortunate reality. So pervasive and successful are these online fraudsters that entire industries have been created to combat them.
But the first and last line of defense is you, the consumer. Only you can prevent wire fraud!
That is why you must confirm any wire or other disbursement instructions received by email with a phone call to your realtor or title company’s office – not the number at the bottom of the email you are trying to confirm.
Because when it comes to wire fraud, real estate buyers can’t go back in time like Marty McFly and “Doc” Brown to fix things. Your money has disappeared, just like the DeLorean…. Once these wires are sent, it’s nearly impossible to recoup the money and clients are being scammed for hundreds of thousands of dollars.
PLEASE, do not send ANY wires without confirming with your AGENT & ESCROW REP.