Protecting Your Transactions From Wire Fraud
July 12, 2018
One of the fastest growing cybercrimes in the U.S. is wire fraud in real estate. About 9,600 people were victims of wire fraud in the real estate and rental sector in 2017, with losses of more than $56 million, according to FBI data.
The highest reported fraud in real estate last year was Business Email Compromise/Email Account Compromise. Fraudsters will assume the identity of the title or real estate agent and forge the person’s email and other details about the transaction. The scammers will then send an email to the unknowing buyer and provide new wire instructions to the criminal’s bank account.
Federal authorities have announced a major crackdown on BEC scammers who are trying to intercept and hijack down payment wire transfers. In June, federal authorities announced their Operation Wire Wire resulted in 74 arrests and recovered about $14 million in fraudulent wire transfers, including real estate.
To make sure your real estate transactions aren’t hacked, urge your clients to verify all email requests involving the wiring of funds or any changes. Urge them to not use phone numbers in these emails but to use their agent’s verified number. These emails often contain bogus numbers. Also, remind your clients that changes to wiring instructions are rare.
“Any party involved in a real estate transaction is a potential target for hackers, including the buyer, the seller, the real estate agent, the lender, the title company, and the closing attorney,” warns an article by the Forbes Real Estate Council, composed of a group of executives in the real estate industry. “Once an email account has been compromised, hackers will quietly monitor messages and activity. They wait for the opportunity to enter the conversation, posing as an actual party to the transaction.”
If you suspect your transaction has been hacked by fraudsters, report the incident to the FBI’s Internet Crime Complaint Center at www.ic3.gov.
“While Cyber Criminals Continue to Target Real Estate Transactions, Take These Protective Measures,” Forbes.com (July 11, 2018)
Updated: November 20, 2018