Wire fraud in real estate transactions is on the rise. Help make sure your clients don’t fall victim to spoofed email or phone calls.
We’ve all heard the horror stories about hackers infiltrating real estate transactions to steal closing funds. As fraudsters become ever more sophisticated, we all have to be vigilant to protect ourselves and our clients.
What are the latest tactics?
Fraudsters create emails that appear to be from an escrow officer—known as “spoofing”—and ask your clients to re-route funds needed to close their transaction. And, because they know responsible settlement professionals have begun using call-back procedures to validate and verify emails regarding wiring of funds, thieves also may try calling your clients using prepaid “burner” phones and applications that can spoof the caller ID of any phone number the caller chooses—even valid phone numbers of actual businesses.
How do they get the information?
The fraudsters hack and monitor non-secure communications between agents, buyers and sellers to gather information about the transaction. They then copy an email template and pose as the escrow officer in a message to clients. They may even add publically available information about the “sender’s” personal identity that can be found on flyers, company web pages and social media to help make the message appear legitimate to the unsuspecting recipient, who then acts accordingly not realizing that their response is being routed to a hacker who is trying to steal their funds.
What can you do to help prevent this fraud?
While you can’t stop hackers from impersonating parties in a transaction, you can minimize the likelihood that your clients will act on fraudulent instructions.
- · Make sure your buyers understand that First American’s wiring instructions will never change. Warn them that if they are ever asked to change the wire information, it’s a scam. Identify our bank and instruct your clients to wire funds only to an account in First American’s name alone—not, for example, “First American Title/Acorn Partners LLC.”
- · First American uses encryption to protect confidential information going back and forth through email. However, be aware that if you or your clients forward that email through an unsecure method, the encryption—and hence the security of the information—is lost.
- · If you suspect an email account has been spoofed, pick up the phone and speak with your clients and your escrow officer directly. Don’t use email for any communication if you believe an account has been compromised.
Your buyers are prime targets for fraudsters, but First American has established a number of procedures to help keep them safe. Make sure they are aware of this latest scheme so they can avoid becoming unwitting victims.