If you haven’t already heard the news, there are some pretty sophisticated scams targeting the real estate industry—the real estate professional, homebuyers and home sellers.
Criminals are hacking into the email accounts of real estate agents or others involved in a real estate transaction and using information gained from the hack to create a fraudulent wire transfer. These hackers often send an email that appears to be from an individual involved in the transaction, informing the recipient (often the buyer) that there has been a last-minute change to the wiring instructions. Or, the wire instructions are simply replaced with fraudulent ones before being delivered—all within cyberspace.
Following the fraudulent instructions, the recipient wires fund directly to the hacker’s account, which will be cleared out in a matter of minutes. Sadly, those funds are lost forever.
Extremely Convincing Real Estate Email Scams from Hackers
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. Like all forms of fraud, this fraud is pervasive, convincing, and constantly evolving with the industry.
The California Association of Realtors® created the Wire Fraud Advisory—alerts buyer and seller of the scam and suggests measures to avoid becoming unknowingly involved in such a scam.
Specifically, one recommendation is to receive your wire transfer information and personally contact the sender. Do not use the phone number on the email; instead, obtain the phone number from your own personal records or other emails that you know were actually sent by the individual. Call and confirm the wiring and bank information over the telephone prior to sending the wire.
How to Protect Yourself from Wire Fraud
Real estate agents use all sorts of email accounts to conduct their business—from Gmail to AOL and everything in between. Some of these email service providers are more secure than others, and it is generally not a good practice for real estate agents to pass on wire instructions to buyers or sellers.
Nevertheless, one excellent way to be sure to have this important conversation with homebuyers and home sellers is to always include the Wire Fraud Advisory form in your office file.
Want help keeping your transaction file compliant? Feel free to call the amazing team of transaction coordinators at Transaction 911.