Real estate fraud is on the rise. The FBI reports that last year, 1 billion in real estate transactions were wired (or attempted to be wired) to fraudulent accounts.
Because real estate transactions usually use wire transfers to move large sums of money, this is a very lucrative scam. The way it often works is the scammer gets access to a realtor or title company’s email account and searches for scheduled home
purchases or refinances. (The scammer may lurk on email chains for weeks waiting for the right moment to pounce.) He then creates a fake email address very similar to the real thing. Because the scammer has seen the real email exchange, he can format
his email so it looks authentic, mimicking the email signature and even the company logo. Using that bogus email, he sends phony wiring instructions, so the money is sent directly to his own bank account.
One of the most insidious things about this scam is that the hackers are taking advantage of you during a time-sensitive and already overwhelming process, which is why it’s easy for even the most diligent of people to become victims.
If either of these two things occur, consider it a red flag and beware:
- You’re told that previous wire transfer instructions were incorrect and are sent new instructions.
- You’re given an excuse for sending the wire transfer to a different account (for example, the usual business account is undergoing an audit).
Just like handing someone cash, a wire transfer is an immediate form of payment and is almost always irreversible. You could lose that money and still have to provide the funds needed to close on the property purchase.
Here are three ways you can avoid this scam:
- Consider physically going into the title company office to pick up wire transfer instructions instead of trusting email. If you can’t go into a physical office, at least take a moment to hover your mouse over any links in the email to make sure
they’re redirecting where you’re expecting.
- Before wiring funds, confirm the instructions by calling your realtor or title agent using a phone number you trust. Don’t use a phone number given in an email if you haven’t used it before. (If it’s a scam email, that could be a
fake phone number.)
- Verify the full email address of the sender. If the email address doesn’t end in the company name, it’s probably a fraudulent email. So instead of seeing Mr.Burns@titlecompany.com, you might see Mr.Burns.firstname.lastname@example.org.
But note that this is NOT a fail-safe method since good hackers can get around this too. It’s just one of several indicators.
If you’ve already sent the funds and now realize it was fraud, take these steps:
- Call your financial institution if the money was wired through them and request a wire recall.
- If you used a money transfer service, call that company right away.
- Report the incident to the Federal Trade Commission and the FBI’s Internet Crime Complaint Center right away. Keep a copy of the FBI report in case your financial institution needs it.
If you have questions or concerns, visit our Security Center at redwoodcu.org/security or give us a call. We have a whole team
at RCU focused solely on our Members’ security.