Beware! Real Estate Transactions and Wire Fraud

Wire transfers have obvious advantages in efficiently facilitating a real estate transaction, but they have made us all more vulnerable to fraudulent activity. The most common tactic is to hack into the emails of the parties involved in a real estate transaction including the emails of buyers, sellers, real estate agents, title companies, lenders, and so on. The hackers gather information from the email chain, then start sending out spoof emails from a new email account that is very similar to the legitimate one. For example, the email address might be only one character different from legitimate email address, making it very difficult to notice. The spoof email message will state that there is a last-minute change in the wiring instructions.  That is when the unsuspecting victim sends off their hard-earned money to the scammer’s fraudulent offshore account instead of the correct party. The cyber-criminal will then immediately withdraw the funds from the fraudulent account, and often the money is gone and cannot be recovered.

How to prevent this from happening to you:

Best Email Practices:

Unsecure email accounts are open doors for cyber-criminals. Follow these guidelines to help keep that door securely shut and locked tight.

•  Whenever possible, avoid sharing sensitive personal information or financial information via email.
•  You should never receive an email request for sensitive information from your REALTOR, banker, lender, or title       company.

•  If you must send sensitive information or financial information via email, make sure to use encrypted email.
•  Never trust contact information in unverified emails. Watch for suspicious emails, such as email addresses with one or two characters different from the email address of a trusted source.
• If an email looks even slightly suspicious, do not click on any links in it, do not open any attachments, do not call any numbers in the email, and do not reply to it.
• Do not use free Wi-Fi to transact business, i.e., free Wi-Fi at coffee shops, airports, etc.
• Avoid using free email accounts for business.
• Use strong passwords and change them frequently.
• Keep your operating system, browser, and security software updated.

Best Wiring Practices:

• Never trust or utilize wire transfer information that has been sent to you via email without first calling your REALTOR or the title company directly (not utilizing any phone numbers within the email) to verify the instructions.
• Never rely on phone numbers or website addresses provided within an unverified email as scammers often provide their own contact information and set up convincing fake websites to support their schemes. Verify phone numbers independently and call those numbers to confirm the wiring instructions.
• When wiring money, the person doing the wiring should pick up the phone and call the intended recipient of the wired funds immediately prior to sending the funds. Then call afterwards to confirm the receipt of the funds.
• Get to know the parties involved in your transaction early on.  A sudden or last-minute change in a title company’s closing personnel is suspicious. Scammers will often make up stories such as, “your closer had to take their child to the hospital, so wire your money here instead”.

Instead of using wire transfer, check to see if the title company will accept a cashier’s check for down payment.

If you have seen any suspicious activity, report it to the proper authorities. In this case, the Colorado Bureau of Investigation.