3 Ways for Clients to Prevent Wire Fraud

It’s your buyer’s worst nightmare: Everything is a go for purchasing the house of their dreams and in the next moment, the entire down payment is gone with little hope in getting it back. Wire fraud has happened all across the country to buyers who have fallen prey to a phishing scam, resulting in losses of hundreds of millions dollars and devastation for those in the process of purchasing a home.

The scam works so well because hackers target email and other accounts with messages relating to real estate activities, collecting contacts/email address of those in the process of buying a property. The scammer then spoofs an email to the buyer, often pretending to be an agent, title company, etc., directing them to wire their down payment to a fraudulent account. For those unfortunate buyers who follow through, they are out their down payment with little chance of ever getting it back.

The key to avoiding fraud is to know what to look for and be diligent about avoiding the traps. Here are a few simple steps to follow during the buying process to help stop scammers in their tracks:

1. Pay attention to how your wire instructions are sent. It is best to only accept instructions that are secure/encrypted.

2. Before you wire funds to an individual or company, call to verify the wire instructions independently with your title company or closing agent.

3. Be very wary of changes. Wire instructions very rarely change, so if you receive an email stating they have, be very diligent in confirming the validity of it independently with your agent or title company.

The best defense against this type of scam is having multiple checkpoints with your title company and agent to ensure everything you are being instructed to do is legit – and phone is best, just make sure you’re talking to the right person. While these checks might feel like overkill, it’s better to spend a little extra diligence to ensure your money is secure!

With scammers increasingly targeting real estate transactions, the National Association of REALTORS® is teaming up with the FBI and brokerage Realty Executives International to educate the industry on how to identify and help clients avoid wire fraud schemes. A particular cause for concern is hackers who send fake emails to home buyers on the cusp of closing on a property purchase, providing bogus wiring instructions. Hundreds of millions of dollars have been stolen from consumers who fall prey to such scams.

“We believe the way to stop these scammers in their tracks is by educating clients to identify, avoid, and report potential fraud,” says Alysia Heun, vice president of franchise services at Realty Executives. “By raising awareness in the real estate industry on how these scams are being carried out, we can create a united front fighting against and working to shut down this devastating trend.”

Source: Realty Executives and Realtormag.com