Laurie K. Schenden
CVAR Communications Manager
Can your clients stand to lose $130,000? That’s the average amount of money stolen in a single real estate transaction in Los Angeles County by cyber thieves, costing Los Angeles $5 million a month, the FBI reported in July.
Cyber scams, which first surfaced in 2013, trick home buyers into wiring money offshore. Computer hackers pose as real estate agents or title companies over email, and give clients fake wiring instructions. By the time the crime is detected, sometimes just hours later, the money can be gone for good, says the FBI’s Michael Sohn, with homeowners losing about $130,000 on average.
I interviewed Agent Sohn, a Supervisory Special Agent who leads the Los Angeles cyber crimes task force, when he spoke at Real Estate REvive Conference & Expo this year. He said that he was eager to attend REvive specifically to warn REALTORS® about the rising problem of cyber theft in real estate transactions.
“My hope for today is to say, ‘Hey, here’s how to prevent hackers from breaking into your email account,'” he said. (See attached video)
Agents should never hand over wiring information to a client except in-person or on paper, “if they do it at all,” says C.A.R. President Geoff McIntosh. “Frankly, the client should deal with the escrow [officer] directly.”
Real estate transactions are an easy target for cyber thieves because they involve large amounts of money that are sent through wire transfers.
Dominique Alepin, assistant regional director for the FTC in Los Angeles, told Radio station KPCC that real estate agents are easily identifiable, and those that rely on Gmail or other email accounts that “are not very secure,” creating an opening for thieves.
“Cybercriminals get access to the real estate agent, thereby seeing which deals are going to be closing that week,” she said.
“The FBI created a task force that consists of Los Angeles District Attorney’s office, Orange County District Attorney’s office, Ventura District Attorney’s office, and San Bernardino police, working together to help combat this crime,” said Agent Sohn.
From C.A.R. and KPCC Radio:
The Federal Trade Commission recently issued its second warning in two years. McIntosh said that he’s been on a mission to educate members about cybersecurity and has sought the help of experts like Sohn.
“REALTORS® are trusting. I think that makes us an easier target,” McIntosh said. “I doubt this would happen as much to attorneys.”
C.A.R. has been urging members to use strong passwords, regularly update computer systems and install anti-virus software. Other ways to avoid getting scammed:
- Home buyers should never trust an email with a change in wiring instructions. Call a previously-verified phone number to confirm the account number. If you haven’t used the number before, go to the website (never through a link in the e-mail) to verify the phone number of the escrow or title company.
- If you get scammed, get your bank to immediately do a wire recall. By the time 72 hours have passed after a crime has been committed, that money is usually gone for good.
Sources: C.A.R.; KPCC