WIRE FRAUD WARNING
The Scheme and How It Works
According to Forbes "In 2017, a Washington, D.C. couple lost $1.5 million in a phishing scam that compromised their title company’s email server. Last year, a Colorado man lost a $56,000 down payment. And just last week, a tech executive lost $260,000. The tales of financial heartbreak go on.
Tom Cronkright, president at Sun Title is now an expert on what he calls the fraudster “playbook.” It all starts with the industry’s Multiple Listing Service and syndication sites like Zillow and Trulia, where thieves can identify pending home sales. The fraudsters then profile all parties in the transaction (largely using publicly available websites) and attempt to hack one of the email accounts involved.
Once they’re in, they bide their time, watching ongoing correspondence until they can step in and send over false wiring instructions to steal away a down payment, closing costs or mortgage payoff funds.
This is usually done with a spoofed email account, like in my case—one that’s one or two characters off from a trusted party in the transaction.
“This is the playbook—rinse, repeat—nearly every single time we’ve seen across the country,” Cronkright said. “It’s methodical.”
The sheer number of parties involved is part of the problem. Everyone is vulnerable, Cronkright said—attorneys, lenders, agents, title companies, sellers and buyers included.
This is how it works:
1. Hackers break into thousands of email accounts without anyone knowing.
2. They watch the activity and spot when someone is about to conduct a real estate transaction.
3. Just before close, they send a phony email to the buyer. This email looks like it comes from the title company, saying they’ve just changed banks, and providing “new” wire instructions.
4. In the meantime, they’ve set up an offshore checking account. When the money changes hands, they cash it out and vanish."
How To Prevent It
According to Security Boulevard "The first step towards protection is acknowledging that you are already a target for real estate wire fraud. It’s also important to realize that professionals in the real estate sector have also been victimized. So, if you or someone you know is buying a home, please research and educate yourselves on real estate wire fraud. This research to protect yourself and your family is even more important than researching which properties you’ll view.
In view of the abundant and severe risks, what should you do if you receive an email instructing you to make a wire transfer payment? Consult these important tips from The Coalition to Stop Real Estate Wire Fraud:
Call don’t email: Confirm your wiring instructions by phone using a known number before transferring funds. Don’t use phone numbers or links from an email.
Be suspicious: It’s uncommon for title companies to change wiring instructions and payment info by email.
Forward, don’t reply: When responding to an email, hit forward instead of reply and then start typing in the previously known email of the requestor. Criminals use email address that are very similar to the real one for a company. By typing in email addresses, you will make it easier to discover if a fraudster is after you.
Confirm everything: Ask your bank to confirm the name on the account before sending a wire. (I also suggest confirming the routing number and account number)
Verify immediately: Call the title company to validate that the funds were received. The sooner it is detected that money has been sent to a wrong account, the better chance you have of recovering the money."