HOW TO PREVENT WIRE FRAUD

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How to Avoid Real Estate Wire Fraud Scams and How Protect Yourself From Real Estate Wire Fraud

Knowing what red flags to look out for is just the first step when it comes to protecting yourself from real estate wire transfer fraud. Knowing what actions to take if you suspect that a thief is trying to take advantage is also key to stopping these thief’s.

So, What Is Real Estate Wire Fraud?

Real estate wire fraud occurs when a thief tricks you, the buyer, into sending your closing costs (your “cash to close”) their way- usually by wiring to a fraudulent account, rather than bringing the money to closing or transferring it to a legitimate account.

When you buy a home, you need to pay closing costs (settlement fees) as part of the purchase. The exact amount of the fees varies by purchase price, they are often between 3 and 5% of the purchase price of a home. If you’re buying a $279,500 home (the median price for a new home in the US, as of August 2018), your closing costs might be between $7,000 and $10,000. (Calculate your closing costs here!)

$10,000 in one transaction is a lot for a thief to get their hands on, which makes it an appealing target. If you’re a victim of wire fraud, it’s often difficult, if not impossible, to get your money back once a thief gets it. There are countless accounts of people who were about to buy their dream home, only to lose out on their money and their purchase.[full frame shot of eye]
Photo by Vladislav Reshetnyak on Pexels.com

How Wire Fraud Scams Work

Most wire fraud scams work because the thief breaks into the email accounts of the buyer’s agent or title company.

And today’s thieves are particularly sophisticated. They aren’t sending out emails with words spelled wrong anymore. Instead, today’s hackers are studying their targets closely. They learn the language and how to imitate the tone and style of an agent or title company when emailing their victims. Once inside an agent’s or title company’s email account, thieves can read previous emails sent between agent and buyers/agent and sellers or the title company and the buyers and they get to know who’s involved in the transaction and the tone of the emails. By getting this information, they are able to mimic the agent or title company and come across as even more convincing when they email their victims.

One of the more common types of wire fraud is when the thief breaks into an agent’s email account and uses the names of the people involved in an upcoming sale. The thief sends an email to the buyer, and tells them that there has been a last-minute change of plans for the closing costs (“Cash to Close”) and the thief tells them to wire the money to a different account. Obviously, that new account has nothing to do with the actual transaction and once the money hits the fraudulent account, the thief takes it and the victim can do little or nothing to get it back.

How to Spot Wire Fraud

Real Estate wire fraud is pretty easy to spot if you know what to look for. You need to double check that everything is what it claims to be so that you don’t end up getting robbed.

When it comes to your money and your potential future home, AND the biggest investment that you will (most likely) ever make- you can NEVER be too careful. If anything feels off or is even remotely suspicious about a message you’ve received from your real estate agent or someone connected to your agent through title, DO NOT do anything until you’ve gotten in contact with your agent.

Common Wire Fraud Red Flags

Keep an eye out for these wire fraud red flags:

You get an email from your agent, from a different email address. If your agent starts emailing you from an entirely different address, you have to reach out to your agent immediately (in person or via telephone). In some cases, the email might come from a different looking email address and in other cases, the thief might try to make the address look like your agent’s real address but with one small change.
An email message with new transfer instructions. Receiving a message with “new” instructions, most likely always at the last minute, with no warning from your agent, is the most obvious red flag.
A message from someone you’ve never spoken to or met. If you receive an email with instructions from someone you’ve never heard of, you are right to feel suspicious. It could very well be a thief trying to steal your money.
The name on the recipient account is not the same. Another red flag and warning sign that you’re about to be a potential victim of wire fraud is if the name on the account you are told to send the money to is not the same as the name of the company who’s supposed to receive the money.
The company you’re working with doesn’t use digital docs, email encryption or regularly sends you financial information over email. While many real estate agents and title companies flat out won’t use email to communicate private information with you, some are not so diligent. You should never give your personal information over email.
The email message is missing its usual signature and warnings after the signature. Most agents and title companies include warnings and disclaimers in every email message they send, cautioning against emailing private information and also cautioning you about the potential for wire fraud. In fact, these warnings are recommended by the American Land Title Association to cut down on cases of fraud. If you receive a message from your agent that doesn’t have the normal signature and warning message, you have the right to be suspicious AND you should act on it immediately.
The email message asks you for very specific personal information. If you get an email asking you to verify an account number, or any other form of private data, you need to reach out to your agent to confirm why they would need that information.
The message asks you to click a link. Never click any links in a suspicious email messages and be wary of them even if they come in what seems to be legitimate messages from your agent or title company. These links might go to fake sites set up just to take your information and money.
There’s a mysterious attachment. You also want to be very cautious about opening attachments sent with an email, especially if your agent or the title company didn’t mention that they would be sending one. The attachment could have a virus or malware on it, making it extremely easy for thieves to get your information and steal your identity and/or money.

 













What to Do If You Think You’re a Victim of a Wire Fraud Scam

As soon as you realize that you may have been a victim of a wire fraud scam, you need to act fast and the faster you take action, the more likely you are to get some money back.

If you realize that the account you were told to transfer money to was a false one, your bank might be able to recall the money, but only if you move fast. Whether your bank can get the money back depends on whether or not the receiving bank has accepted it and whether there’s a cancellation agreement in place between the two financial institutions or not.

But remember, whether you get your money back or not, you want to report any incidences of wire fraud to the right authorities:

  • your local police force
  • the FBI, which contains the Internet Crime Complaint Center
  • the Federal Trade Commission (FTC)



While reporting the wire fraud to the right authorities might not result in any action right away, it does help law enforcement put together a case and begin to understand methods a thief might use to get private information and steal more victims’ money.

Always Work With a Title Company You Can Trust

When you’re buying a home, it’s essential that every person you work with has your best interests at heart throughout the entire closing experience.

At Nona Title, we are committed to keeping your private information safe and secure, that is why we use a digital doc system that is encrypted and we NEVER have our agents ask for your personal information. Our company uses the best practices laid out by the American Land Title Association (ALTA) and we follow the rules created by the Consumer Financial Protection Bureau (CFPB), with the goal of keeping your information safe and secure.