By: Darlene Davenport, 2020 GTR President
Phishing, hacking, wire fraud – these are all ways people attempt to steal from others online. As real estate continues to enhance online opportunities to complete business transactions, the chances of being caught up in a cyber scam have become even greater.
Cybercrimes have become increasingly sophisticated over the years and the people perpetrating them focus on situations where a lot of money is changing hands, making real estate transactions an ideal target.
We have all been warned about a wiring scam during the closing stage of the home buying and selling process. Hackers will break into the email accounts of consumers and real estate professionals to get details about a real estate transaction. The hacker will then send an email pretending to be the buyer, seller, real estate agent or someone else involved in the closing process and say there has been a last minute change and provide new wiring instructions; the instructions send the closing costs funds directly into the hacker’s bank account.
I witnessed a client go through this very situation and we notified our clients about wire fraud upfront. Unknown to my buyer, his email was hacked, the hackers had picked up email correspondence between my client and his lender that included his disclosure. Next, they emailed my client with urgent messages including the instructions to wire his funds. My client was traveling for business and rushing to meet the demand prior to the close of the business day and reacted quickly to the demand. Once the wire was completed, he called me to say he realized he had not heard from me, his lender or anyone he was familiar with in the deal to send the money. It was at 6 p.m. in the evening, I immediately said it was a scam as it was a week prior to closing and I knew we did not have all in order for funds to be wired at this early stage. I went into action immediately with title, FBI and anyone else we could call and by the next morning, we had identified through the FBI where the funds were sitting. The timing was crucial as the account the funds were sitting in had an automatic transfer in place that would have sent the money out of the country that day, very little recourse once it is out of the country. This was a few hundred thousand dollars!
While it may seem like there are hundreds of ways for a criminal to take advantage of a consumer online, there are just as many ways consumers can protect themselves. Here are a few tips to help home buyers and sellers recognize and void real estate scams:
- Do not send sensitive information via email. Don’t send banking information, your social security number or anything else that could be used to comprise your identity over email. If you absolutely must send personal or sensitive information via email, only use encrypted email.
- Do not click on unverified email. If you do not recognize the name or email address of the sender, do not open the email and beware of any attachments or downloadable files from unknown email addresses; they can contain viruses or provide a way for a hacker to access your computer.
- Do not use unsecured Wi-Fi. It may seem harmless to check banking information using the free Wi-Fi at your local coffee shop, but using an open connection can leave you vulnerable to hackers and scammers. Only access sensitive information on your home computer or on a secured network.
If you suspect fraud, tell someone. If you suspect that fraud has or is in the process of occurring, contact all parties connected to the transaction immediately. Unfortunately, often there is nothing that can be done to retrieve money stolen in the scam, however, you should still report the incident to the FBI’s Internet Crime Complaint Center or the Federal Trade Commission.
Stay safe and be well my friends.
