According to the FBI, the Internet Crime Complaint Center saw a 480 percent increase in the number of complaints filed in 2016 by those in the real estate industry. Most of these complaints were related to wire fraud, a scam becoming more common in the real estate industry.
This past June, news broke that a real estate phishing scam cost a New York State Supreme Court judge over $1 million. In fact, earlier this month, the FBI told the Washington Post that in 2017, cyber criminals stole or attempted to steal almost $1 billion from real estate purchase transactions. That figure is up from $19 million in 2016, which makes wire fraud the fastest growing real estate cybercrime in the U.S.
So how can this be prevented from happening to homeowners, sellers, mortgage brokers and lawyers? Mortgage brokers, lawyers and agents need to consider beefing up their internal security systems and may want to consider cyber insurance, although they’d need to do their due diligence since this form of insurance is relatively new.
Buyers and Realtors can do several things to protect themselves including:
- Know when you could be targeted and be suspicious and alert as the most vulnerable time is right before a transaction closes and homebuyers prepare to send a wire transfer
- Be wary of wire transfer emails that change the instructions at the last minute or ask you to click a link or enter a password
- Scan the email for typos or other small inconsistencies–including the email address sending the instructions
- Always verify the wire transfer information you received in the email by phone or in person
- Change your password regularly and avoid emailing about wiring instructions on an unsecured network, like that at a local coffee shop.
Realtors, attorneys, title insurance companies, and other real estate professionals should consider adding this language to their wiring instructions and their e-mail signature: “IMPORTANT NOTICE: Never trust wiring instructions sent via email. Cyber criminals are hacking email accounts and sending emails with fake wiring instructions. These emails are convincing and sophisticated. Always independently confirm wiring instructions in person or via a telephone call to a trusted and verified phone number. Never wire money without double-checking that the wiring instructions are correct.”