Protect yourself from wire fraud
In 2017 there was a barrage of scams and attacks on real estate transactions by cybercriminals attempting to steal funds from wire transfers. Yes, even right here in Boulder! Cybercriminals have stolen hundreds of thousands of dollars by re-directing wiring instructions in the middle of a real estate transaction. For many victims, their entire life savings have been lost.
According to the National Association for Realtors® (NAR) website, “One of the fastest growing cybercrimes in the U.S. is wire fraud in real estate. About 11,300 people were victims of wire fraud in the real estate and rental sector in 2018 (a 17% increase over 2017), with losses of more than $150 million, according to FBI data.”
Now, in 2020, many more safeguards are in place, but it can still happen. It’s never a good year to have money stolen from you, but for it happen in 2020 during the uncertainty of a pandemic would be even more devastating. Therefore, don’t let down your guard. Make sure to review the best practices below and keep your real estate transaction safe.
Electronic wire transfers have obvious advantages in facilitating a real estate transaction, but they have made us all more vulnerable to fraud. The most common tactic for scammers is to hack into the e-mails of those involved in a real estate transaction. This includes home buyers, home sellers, real estate agents, title companies, mortgage lenders, attorneys, and on and on. The hackers gather information from the e-mail chain, then start sending out spoof e-mails from a new e-mail account which is very similar to the legitimate one. For example, the e-mail address might be only one character different from legitimate e-mail address, making it very difficult to notice.
The spoof e-mail message will state that there is a last-minute change in the wiring instructions. That is when the unsuspecting victim sends off their hard-earned money to the criminal’s fraudulent offshore account instead of the correct party. The cybercriminal will then immediately withdraw the funds from the fraudulent account, and often the money is gone and cannot be recovered.
How to prevent this from happening to you:
Best e-mail practices:
Unsecure e-mail accounts are open doors for cyber-criminals. Follow these guidelines to help keep that door securely shut and locked tight.
• Whenever possible, avoid sharing sensitive personal information or financial information via e-mail.
• You should never receive an e-mail request for sensitive information from your real estate agent, banker, lender, or title company.
• If you must send sensitive information or financial information via e-mail, make sure to use encrypted e-mail.
• Never trust contact information in unverified e-mails. Watch for suspicious e-mails, such as e-mail addresses with one or two characters different from the e-mail address of a trusted source.
• If an e-mail looks even slightly suspicious, do not click on any links in it, do not open any attachments, do not call any numbers in the e-mail, and do not reply to it.
• Do not use free Wifi to transact business, i.e., free Wifi at coffee shops, airports, etc.
• Avoid using free e-mail accounts for business.
• Use strong passwords and change them frequently.
• Keep your operating system, browser, and security software updated.
Best wiring practices:
• Never trust or utilize wire transfer information that has been sent to you via e-mail without first calling your real estate agent or the title company directly (not utilizing any phone numbers within the e-mail) to verify the instructions.
• Never rely on phone numbers or website addresses provided within an unverified e-mail as scammers often provide their own contact information and set up convincing fake websites to support their schemes. Verify phone numbers independently and call those numbers to confirm the wiring instructions.
• When wiring money, the person doing the wiring should pick up the phone and call the intended recipient of the wired funds immediately prior to sending the funds. Then call afterwards to confirm the receipt of the funds.
• Get to know the parties involved in your transaction early on. A sudden or lastminute change in a title company’s closing personnel is suspicious. Scammers will often make up stories such as, “your closer had to take their child to the hospital so wire your money here instead”.
Instead of using wire transfer, check to see if the title company will accept a cashier’s check for down payment.
If you have seen any suspicious activity, report it to the proper authorities. In this case, the Colorado Bureau of Investigation.
Duane Duggan has been a Realtor for RE/MAX of Boulder in Colorado since 1982. Living the life of a Realtor and being immersed in real estate led to the inception of his book, Realtor for Life. For questions, e-mail Duaneduggan@ boulderco.com, call 303.441.5611 or visit boulderco.com.