Protecting Yourself Against Wire Fraud
Wire fraud is a criminal act and involves a scheme to defraud a victim of money or property. The real estate industry continues to be a target of wire transfer fraud given the large amounts of money involved in each transaction. According to the FBI, Americans lost nearly $150 million to real estate scams in 2019. Scams in the industry have jumped more than 1,000% since 2015, and real estate is now one of the top victims of malware attacks in the country. And, unfortunately, only 15% of all wire fraud incidents are reported.
More recently, the global pandemic has created an opportunity for hackers to target real estate transactions even more aggressively. Hackers are preying on any relaxed online security of those working from home and capitalizing on the increase in remote communication.
Example of How Wire Fraud Works
An example of a likely fraud scenario is the following: the buyer will get an email from a real estate agent or title company with altered wiring instructions. The buyer then wires the money, but later finds out that the title company has not received the funds for settlement and the buyer is out thousands of dollars to a thief.
At Land Title we believe that direct verbal communication and education are our best defenses against wire fraud. In fact, Land Title will call consumers during the course of a transaction to educate about wire fraud. Additionally, all sensitive communication from Land Title is always sent via a secure email and sensitive data that we store is encrypted for safety.
Here are some key things to be on the lookout for to prevent falling victim to a wire fraud scheme:
- Emails that emulate company footers and logos
- Attempts to change wiring instructions (Land Title will never provide or change wiring instructions via email)
- Attempts to target specific payments – diverting payoffs and broker commissions
- Emails trying to divert funds prior to closing
- Phishing emails such as those asking you to renew login credentials or passwords. Be aware of bad grammar and spelling issues as well as an email conveying a sense of urgency. Often this urgency is coupled with details that the contact is unavailable (example: a broker saying that funds have to be sent in the next two hours, and that the agent is in a seminar and can’t take calls…)
Real Estate Agent Preventative Measures
From day one, it is recommended that real estate agents inform their client on how they will be communicating throughout the real estate transaction and how and other parties involved in the transaction (i.e. title company) will be contacting them. Other tips include:
- Remind your clients that you will never ask that they send sensitive information via email.
- Prior to having clients wire funds, have them contact the intended recipient of the wire and confirm that the wire information is accurate.
- Do not open suspicious emails. If you do happen to open an email that looks suspicious, do not click on any links, open any attachments or reply to the email.
- Make sure to change your usernames and passwords frequently and never use passwords that are easy to guess like “password” or “123456”.
- Ensure you have anti-virus technologies installed and have an up-to-date firewall.
- Do not save wiring instructions on your desktop to send to the client. Land Title always sends its wire instructions via secure email.
- Always double check and verify the phone number provided in the email against a known number for the intended recipient of the wire.
If you do find that your email has been compromised, please take the following steps:
- Immediately change all your usernames and passwords.
- Contact any clients that may have been involved during this transaction.
- Report the fraudulent activity to the FBI: www.fbi.gov/scams-safety/e-scam
- Also report any fraudulent activity to the state and local REALTOR® associations so they can spread the word.
Rest assured, Land Title and our in-house IT team have implemented measures to ensure that all sensitive information that a client provides is encrypted and protected on secure sites throughout the real estate transaction. Our closing team will also be in continuous communication with all parties involved with the transaction from the beginning to the end of the closing.
Wire fraud can be stopped with the right preventative measures and education.