Wire Fraud is becoming a more frequent issue for today’s homebuyers. Buyers are tricked into wiring their down payment or remainder of closing expenses to fraudulent accounts set up by criminals that have spoofed emails in order to make them look professional and make the recipient believe they are legit. These losses are often not covered by the bank since most wires go overseas and are impossible to recover! There have been victims who have lost six-figure sums and had to terminate the transaction on their dream home due to this type of fraud. This nightmare scenario has earned the name “business email compromise scam” and rightfully so. This type of scam targets businesses that deal with individuals, such as those involved in a pending real estate transaction. The criminals behind these scams are able to trick homebuyers in a variety of ways, most of which do not require advanced technology or technological knowledge to perform. The criminals infiltrate real estate agents or attorneys emails with malware and then are able to monitor emails between client and professional regarding upcoming closing costs.
Once the scammer is able to send legitimate looking emails on behalf of the real estate professional, they request a sudden change on payment plans. These changes in payments plans often include the buyer wiring money to off-shore accounts, likely to never be recovered. Email compromising scams in real estate are on the rise, according to cyber security professionals that reported a drastic 14 times increase since the past year alone. With this in mind, it is increasingly important home buyers are aware of the steps they can take to prevent this from happening to them. First, being vigilant and aware of these types of scams is important, as well as verifying any suspicious activity associated with a home purchase.
Second, the importance of voice verification is stressed. This means clients and real estate professionals provide voice verification to back up any requests involving e-signing and divulging financial information of any kind. Another important step in prevention is involving your bank. Most banks will honor you request to not allow wire transfers without a voice verification from the account owner. It is important when dealing with wire transfers that there is a note put in place that allows for steps to be taken before wire transfers can be completed. Lastly, be on the lookout for emails requesting that you take immediate action. Approach these emails with caution and suspicion by confirming requested action with a known phone number. Home buying should be a rewarding process for all parties involved. By staying educated and alert we can ensure that everyone has a positive home buying experience!