Real estate wire fraud is exploding across the U.S., costing consumers billions of dollars each year. While digital technology has made the process of escrow settlement faster and more convenient, it has also enabled scammers with the right tools to wreak havoc on unsuspecting homebuyers. And, because it involves real estate properties, the financial losses can be devastating.
Cyber criminals use various methods to hack into the email systems of real estate agents, title companies and escrow companies. They then monitor pending transactions to pick the right moment to jump in by sending a fake but official looking email to the homebuyer with new wiring instructions.
An unsuspecting person might not realize that the email addresses of the parties involved are slightly different, with just one letter changed. Everything else – the logo and branding and the names of the parties involved – looks official. With escrow closing within a day or two, there’s an urgency so the homebuyer doesn’t want to foul things up. The homebuyer complies with the instructions and wires the funds to the account listed in the email. Only, it is actually being sent to some offshore account, never to be recovered.
How to Prevent Real Estate Wire Fraud
Because financial institutions are required to follow authorized wire requests, you are the first and last line of defense against real estate wire fraud. The first step to preventing it is to be aware that it does happen and to be extra vigilant during the escrow process.
Always voice verify email instructions: If an email involves any changes in instructions, e-signing a document, providing financial information, or logging into a website, call a phone number from your original documents to speak with a person.
Add a checkpoint: Call your bank and request that they hold any wire transfer request until they voice verify with you. Pause before acting: Emails asking you to take immediate action should be regarded with suspicion. Always voice verify using a known phone number before taking action.