If you’re getting ready to buy a home or know someone who is, please, please warn them about the growing crime of real estate wire fraud. I just talked to a friend who is an Arizona Realtor. He told me what happened to a client who didn’t heed his warnings. She became a victim and almost lost $70,000. The message here is it’s all about verifying and communicating.
My friend Ron says his 70-year old client was so excited about the purchase of a home that she missed some obvious red flags. The client, whom we’ll call Ruth, was supposed to close on a property in September. It’s now November, and she lost out on the home purchase and has only recovered $50,000.
Ruth is lucky because she happened to tell Ron that she had wired funds. Ron was alarmed because he knew the title company had not sent the final settlement statement, and he wanted to double-check her instructions. That’s when they discovered she had been scammed. Had she waited just a few more hours she would have lost the entire amount with no hope of recovery.
Ron tells me FBI agents combed through Ruth’s computer. They discovered hackers had been reading her emails and knew about her upcoming home purchase. At just the right time, they sent her a phony email detailing where to wire her funds. The wiring instructions looked like they came from the title company, but they were from fraudsters.
Ron says two calls to the phone number listed in the email were answered by a man with an Asian accent. On the third call, the number was disconnected. The FBI is still trying to track down the crooks.
Jeff Lanza, a retired FBI special agent who is a nationally recognized cybersecurity expert told me, “Residential real estate wire fraud is a crime epidemic today.” He provided me with FBI statistics that show in 2016 there were diversions or attempts to steal $19 million in real estate wire transfers. In 2017, that number had skyrocketed to $969 million.
Lanza now travels the country, offering solutions to handle such cyber threats. He says such crimes are easily preventable. He told me, “You must assume any wire transfer instructions that are sent by email are fraudulent until proven otherwise. Before a wire transfer is sent, always talk to the recipient about the instructions on the phone. Never rely on email instructions alone.”
He also warned about calling numbers listed in such emails. Lanza says, “It could be a phony number connected to a call center set up by criminals who know the call is coming. They know all the information because they hacked into the email account.”
Sadly, there is no protection in wire transfer fraud. The FBI can investigate, but it’s usually too late. Lanza says, “You’re telling a bank to move your money so the bank is following your instructions. It’s under no obligation to ask, ‘Is this correct?’ It’s up to you, the sender of the money to make sure.”
Consumers aren’t the only ones being scammed. Lanza says realtors and title companies are also being hijacked. The best advice is to protect your email account. Choose strong passwords and change them every 90 days. Also, never log in through a pop up or link. If you get an email which appears to be from your email provider asking you to log in and verify your account, don’t do it. Lanza says that’s typically a trick by crooks to steal your log in credentials.
I learned that real estate wire transfer fraud is really a symptom of the main problem of people not protecting their email accounts. It’s a pain to change passwords so often, but we all must protect ourselves. Before wiring funds, always verbally verify all the information first. Remember the crooks are waiting and watching and hoping that we’ll be slack and sloppy.