Our initial blog warning all of our clientele of wire fraudsters was very well received. Hence, we are following it up with even more information to combat these nasty evildoers.
A Colorado couple recently lost their life savings – a $272,000 down payment – as a result of wire fraud. Now they are filing suit against the bank, the title company and the realtor alleging that none did enough to protect their financial information. But whose fault is it, really? After all, it is the buyer who actually wires their money to the fraudsters.
Here’s how these wire fraud schemes work.
First, hackers gain access through the email of a buyer/seller involved in a real estate transaction. They monitor the emails as they go back and forth, and then determine who may be requested or has been requested to send funds. Then, mimicking the realtor’s or title company’s email address, they send the buyer a message requesting that they change the payment type (from a check to a wire transfer) or change the recipient to a different account (one under their control). Then your money is gone.
Three Clichés to Prevent Wire Fraud
At World Wide Land Transfer, we understand that fraudsters will always find a way to make chaos. It’s what they do. At the moment, one of their favored targets is real estate transactions. A shocking report produced by the FBI found that wire fraud attacks targeting real estate transactions increased 480% in 2016.
With these kinds of attacks not slowing down, it’s imperative that everyone be responsible and remain vigilant. As Smokey Bear would say: “Only you can prevent forest fires.”
We’ve used that cliché, plus two others, to try and bring buyers into the fold so they can join us in protecting their money from wire fraud. Real estate professionals, title companies, realtors, lenders, we hope you will share this with buyers, sellers and colleagues!
1. It’s 3 a.m. Do you know where your children are?
The question is not where are your children, it’s where are your funds for closing? For too many real estate buyers it’s in the account of a fraudster.
2. Look both ways before you cross the street
You heard it a thousand times as a kid: “Look both ways before you cross the street, or you’ll get hit by a car.” The same is true of wire fraud. Real estate transactions are particularly vulnerable.
If you don’t verify your wiring instructions, your closing funds may end up somewhere they’re not supposed to be – like Nigeria, Albania or the Ukraine in the account of the hacker who just pretended they were your realtor.
Even though we are a title insurance company that follows all ALTA Best Practices to protect your escrow money, there is nothing we can do if consumers follow the fraudster’s wire instructions. Once you hit ‘send’, there’s no hopping in that DeLorean and travelling back in time to ‘recall’ your message. And now the funds are gone.
3. Only you can prevent forest fires
Remember Smokey Bear? He was big on personal responsibility. He said, “Only you can prevent forest fires.” That kernel of wisdom is also true of wire fraud. In the age of the internet, identity theft is an unfortunate reality. So pervasive and successful are these online fraudsters that entire industries have been created to combat them.
But the first and last line of defense is you, the consumer. Only you can prevent wire fraud!
That is why you must confirm any wire or other disbursement instructions received by email with a phone call to your realtor or title company’s office – not the number at the bottom of the email you are trying to confirm.
Because when it comes to wire fraud, real estate buyers can’t go back in time like Marty McFly and “Doc” Brown to fix things. Your money has disappeared, just like the DeLorean….
If you haven’ already read it, see How to Prevent Wire Fraud in Seven Easy Steps