Wire Fraud and someone hacking into email to take advantage of the public is nothing new.
Now business email compromise or wire fraud has targeted real estate transactions and buyers wiring money to close on the purchase of property. Eight people involved in a scheme to target a Real Estate agency in Memphis were recently arrested where the suspects allegedly stole up to $15 million from clients. The Washington Post published an article on the new scheme and the millions of dollars involved.
How did they do that? Hackers find their way into the email accounts of parties that are likely to be involved in real estate transactions. The agents, escrow officers and lenders are prime targets, but even inspectors are watched. The hackers may send an email with a link, or a text message with a link that ultimately gets them into the email of the parties. Once in, they quietly sit back, watch and wait for the correspondence between parties in a real estate transaction to approach closing. The buyer is sent an email from the hacker posing as the escrow officer or agent informing them that there is a last-minute change in the closing amount due or timing of the closing. This change will require their immediate attention, and the wire instructions for the money needed are sent to the buyer. In a panic, the buyer (who has enough on their mind already), sends the money. The money is on its way to an off-shore account controlled by the hacker in the blink of an eye. Gone.
So what are the red flags and what can you do?
- Only open links from folks you know or trust in an email or text message.
- The hacker usually uses an email or a phone number that is similar to the third-party you are used to dealing with, but they are different. Don’t dismiss the discrepancy. It is not who you think it is.
- Set up the account with a password that your escrow officer sent you when you started the process. I know you have too many passwords now, and it is such a hassle, but it will ensure that your correspondence will be encrypted and secure. Don’t bypass this step by asking your Realtor to just forward this information so you don’t have to log in. Hackers love to set themselves up in an email account to have forwarded email go to them.
- When you first meet your escrow officer, get their phone number and save it in your phone book. When they call you will know it is them, and confirm everything with them over the phone. Not by email.
- You will not receive wire instructions by email and the bank trust account for the closing funds will not change.
- Discounts or seller changing the price of the home at the last-minute? Not going to happen. Red flag.
- If something seems off, change your password.
- Avoid using words such as “closing”, “purchase contract”, “wire instructions” in the subject of an email. It is a wake up call to the lurking hacker.