Millions of dollars have been reported from losses due to wire fraud. What you need to know and how to protect yourself.
The real estate industry has become highly digitized in recent years and most of the business is conducted online, from negotiations and contracts to wire transfers to send earnest money, down payments or even the full purchase price of a home.
With such large sums of money involved in real estate transactions, both buyers and sellers are often victims of wire fraud. “What we’ve seen happen a lot in the industry is a buyer will receive an email that alters wiring instructions that might look like it’s from the title company, but it’s not,” says Melissa Gibson, Assistant Vice President and Branch Manager at Land Title Guarantee Company in Steamboat. “The email might have the same company logo and look official, but if you look at it carefully, you might notice something is amiss, like a misspelling, a grammatical error, a capital letter where there shouldn’t be one, or the email address itself might be one or two letters off.”
Gibson explains that hackers will often monitor real estate agent’s email accounts so they are aware when a transaction is about to take place. When they know a deal is set to close, they send a change in wiring instructions at the last minute that is made to look like it’s from a reliable source. Title companies have also seen hackers posing as the seller, emailing the title company with changes for where the seller’s proceeds should be wired. Again, sometimes these emails are easy to detect by their errors, but it is important to know that wiring instructions should not be sent via email. If the only option is to email them, consumers should always follow up with phone call to confirm the details of the wire transfer instructions prior to initiating the wire.
“Unfortunately, once the money is wired, there is nothing we as a title company can do to get it back,” says Gibson. “So, if a buyer is relying on wiring instructions sent from a hacker and doesn’t follow up with a phone call to verify the instructions, we have no control over that. Large sums of money can be stolen and once it’s gone, it’s often overseas, impossible to trace, and there is no getting it back.”
Gibson says Land Title has taken measures to protect their clients from wire fraud. Their in-house technology team have implemented measures to ensure that all sensitive information that a client provides is protected on secure sites throughout the real estate transaction. Additionally, wire transfer instructions are always sent in a secure email so only the intended recipient should be able to open them. Land Title’s closing team will also be in continuous communication with all parties involved with the transaction from the beginning to end of the closing.
On a positive note, preventing wire fraud is relatively simple. “Always, always, pick up the phone and call to verify wiring instructions,” Gibson says. “We live in time when people are so reluctant to reach out by phone, even in business. But that simple step goes a long way in protecting yourself and your funds.”
Here are a few other tips Land Title Guarantee Company in Steamboat suggests to their clients:
Establish a communication protocol.
From day one, ask your broker how they will be communicating with you throughout the real estate transaction and how any other parties involved in the transaction (i.e. title company) will be contacting you. Let them know that you will never send sensitive information via an email.
Pick up the phone.
Prior to wiring funds, always contact the intended recipient of the wire and confirm that the wire information is accurate. If you receive any correspondence via email regarding funds related to your transaction or a change to any information that you have previously received, call to verify that the email was sent from a legitimate source, and verify the details of the email over the phone. Also, make sure you are calling a legitimate phone number – not just a number that a hacker may have put into the fraudulent email, to field these types of calls.
Think before you click.
Never, ever open suspicious emails. If you do happen to open an email that looks suspicious, do not click on any links, open any attachments or reply to the email.
Protect your information.
Clean out your email on a daily basis and save important emails to a secure location. Make sure you have anti-virus technologies installed and have an up-to-date firewall. Make sure to change your usernames and passwords frequently and never use passwords that are easy to guess like password or 123456. Do not save wiring instructions on your desktop. Land Title always sends the instructions via a secured email. The best way to protect your email account is to use a 2-step verification process.
When in doubt …
Always double check and verify the phone number contained in the email for the intended recipient of the wire.
For more information about how to protect yourself from wire fraud, contact Melissa Gibson at Land Title Guarantee Company, at mgibson@ltgc.com.
Also check out these articles from the REALTOR MAGAZINE and LAND TITLE about the threat of wire fraud in real estate transactions and how to avoid it.
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