Buying or selling a home requires a lot of faith. From listing to closing, clients place a lot of trust in their real estate agents and brokers. They also put faith in their finances — when dealing with large sums of money, it’s only natural to get anxious over making sure it’s properly transferred from one party to the other. Add in the threat of criminal wire transfer schemes, and it makes complete sense why clients are counting on their real estate broker. Fortunately, it’s easy to educate your clients about wire transfer schemes and how they can prevent fraud and theft on their transaction.
What is wire fraud?
Like mail fraud, wire fraud is when criminals use email, phone, text or other electronic communications to convince their target to reveal personal financial information and reroute that money from its original destination to their own accounts.
Real estate wire fraud often begins with a technique called phishing.
Hackers will set up email accounts or even send text messages that look like they come from trustworthy companies. Often, they claim that payment details have been exposed, they’ve noticed suspicious login attempts, or request payment in any form. There may be links or attachments on these emails. A hacker wants you to make a payment, open the attachments and click on the links so they can access your computer. They then can steal login information and other valuable data.
Once the hackers gain access, they can monitor that person’s email and look for correspondence about wire transfer transactions. Then, they will create their own wire transfer that looks like it came from the institution or broker the buyer has been working with and replace the account numbers with their own details.
Is wire fraud becoming more popular?
From incessant telemarketer calls to fake emails and text messages, phishing and wire fraud schemes are on the rise. In March 2020, when the coronavirus pandemic hit the United States, the FBI quickly saw an increase in fraud schemes and warned consumers to be vigilant in identifying any attempts to steal personal information.
Each year, the FBI releases its Internet Crime Report, and in 2020, it recorded stories from 791,790 complainants. That’s 300,000 more than there were in 2019, when they recorded 467,361 cases. And that means there have been more losses too. In 2020, victims lost more than $4.2 billion, compared to $3.5 billion in 2019 and $2.7 billion in 2018.
How can I prevent wire fraud?
Prevention is the key in stopping real estate wire fraud. It’s much easier to prevent it from happening than it is to reverse the damage once it’s been done. So, pay attention to these signs to ensure it doesn’t happen to you.
Don’t: Send payment details by email. It’s an insecure method of communication and is easily hacked.
Do: Use phone or snail mail to send payment details. If using a website, ensure that it’s secure by checking for “https” in the website URL bar. The “s” stands for secure. Some web browsers won’t let you access sites that look suspicious, so make sure you’re using a trustworthy one such as Safari, Chrome or Firefox, and that you’re keeping it updated.
Don’t: Click on links, open attachments or reply to email senders you’re not familiar with. Don’t call any phone numbers with which you’ve not previously corresponded.
Do: Verify all contact information with relevant brokers, attorneys and organizations. Use these same details throughout the duration of your transaction, and don’t use anything else.
Don’t: Fall victim to last-minute change requests or anything with an urgent tone without verifying with your broker first. Hackers often use pressuring language to get victims to comply.
Do: Treat an inability to be reached by phone, in person or otherwise as suspect.
Don’t: Blindly trust what comes through your email inbox. Hackers frequently change their tactics and will disguise their criminal intent by appearing like a company you trust.
Do: Trust your gut. If the email looks a little fishy, or you weren’t expecting it, it’s probably a scam.
What do I do if I become a victim of wire fraud?
First, contact your financial institution and inform them of the fraudulent transfer. Ask them to contact the receiving financial institution, and if they are unable to, contact them yourself. If you notice the fraud shortly after it happens, contact your local FBI Bureau. It’s easier to recover stolen funds the sooner it’s noticed. Also, be sure to file a complaint with the FBI online at IC3.
Molly Eldridge is one of the top brokers for protecting her clients against real estate wire fraud scams. She stays up to date on the latest technology and phishing news to ensure her clients’ financial interests are her top priority.