Real estate money wire transfers are high dollar targets for cyber-crooks. Learn how to protect your money during settlement.
Money wire fraud in the real estate industry has surged in recent years according to the FBI with a 480% increase in complaints in 2016, and over $1 billion lost in the U.S alone.
Understanding how wire scams work is key to protecting your money
The majority of wire fraud crimes begin as email hacks. Those most at risk in real estate transactions are the title company representative, the real estate agent, and the client.
First, a cybercriminal will infiltrate the users email when an attachment is opened or a link is clicked within a malicious email allowing malware into the computer. Sometimes hacking-related breaches begin by way of stolen passwords or passwords that are easy to guess, such as: 123456, qwerty, or football.
The hacker then scans the victim’s emails to look for active real estate transactions, specifically upcoming home purchase settlements. Once the criminal knows that a settlement is imminent, they step in.
Assuming the identity of the title company representative, they email the buyer a spoof email with fraudulent money wire instructions – detouring their closing payments into an alternative bank account. The email often supplies a phone number to call to confirm the wire. Before the buyer becomes aware of the scam, the cybercriminals have already withdrawn the money and disappeared.
Take these Steps to Insure Your Money Transfer Remains Safe
- Talk to your real estate agent to learn about the money wire process. Be suspicious of last minute changes to closing procedures. Your real estate agent should always communicate directly with you about closing details.
- If you receive an email requesting you to wire money, always call the title company to verify the instructions using a telephone number you know is correct. Never trust the phone number in the email containing wire instructions. Scammers have created legitimate looking signature blocks with their own contact information.
When available, use a secure file-transfer service or a client-access portal that your title company uses to send documents.
- If you are uncomfortable wiring money, consider using a certified paper check from your bank – delivering it in person or through your real estate agent at closing to avoid online money wiring all together.
- When in doubt, contact both your real estate agent and the title company to confirm all transactions. Maintaining communication with all parties during settlement is crucial to protecting your assets. Since you are the one transferring the money, don’t be shy about verifying and re-verifying the procedures with trusted sources.