Thanks to our friends at McManamy, McLeod, and Heller for the following information regarding wire fraud and how to spot/prevent it in real estate transactions!
In the last year since the real estate market has taking a turn for the better, real estate professionals have been targeted in wire scams that typically involve hacking an e-mail address. Hackers will access an e-mail account associated with a real estate agent, the buyer, the seller, and even the closing attorney in order to obtain information about an upcoming real estate transaction. After monitoring the account to determine the timing of the closing, hackers will often impersonate the e-mail account holder and send fraudulent wire instructions to the closing attorney or other parties to the real estate transaction. Sellers are targeted when proceeds from the sale are redirected to the hacker's bank account; buyers are targeted by sending the buyer fraudulent instructions regarding the wire of transaction-related funds to the closing attorney.
Once the hacker starts monitoring the exchange of e-mails in the hacked account, the fraudulent communication usually includes detailed and accurate information pertaining to the transaction, such as file numbers, key dates, names, and addresses. It is important to note that the e-mails may come from a legitimate e-mail address because the thief is actually sending the e-mail from a truly legitimate, although hacked, account. In other instances, the e-mail is sent from a similar looking e-mail address, but not the actual same address as a party to the transaction. Pay special attention to e-mail addresses when you see changes such as these!
Real estate agents can take precautions to prevent wire fraud from affecting their clients and their transactions. Educate your clients on wire fraud and make sure that prior to wiring any funds, the wirer contacts the intended recipient via a verified telephone number or in person to confirm the wiring instructions. In that telephone or in-person conversation, the correct account number information should be repeated verbally before taking any steps to have the funds transferred.
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