One of the biggest scams everyone should be aware of in real estate industry is wire fraud; this is where a hacker/criminal poses as the title company, attorney or real estate agent and gives the buyer instructions to wire money for the closing to a fake account. Billions of dollars were lost in 2020 in wire fraud scams, often wiping out people’s entire life savings. There are some traps that you can avoid by understanding how these criminals operate and being diligent when reviewing emails. Hopefully, this overview will give you confidence in the home buying process.
The first thing consumers need to do is understand how scammers work, they typically operate in 2 fashions: phishing or spoofing. Phishing is when scammers pretend to be from a reputable company and they ask you to click on a link in their email to get your personal information and gain access to your computer, once they gain access to your computer, they can read your emails and see that you are purchasing property and get all the info surrounding the purchase. They can then act as a bank and/or title company and ask you to wire them the exact amount of money you were supposed to wire the title company (they will do this before the title company you are working with will ask you to wire the money). Spoofing is when the scammer uses an email, web address and/or phone number that looks like the information you have been using when communicating with your attorney, real estate agent or title company, the address is usually off by one letter or number. These emails often contain much of the same personal information that you have become familiar with in past correspondence.
Some of the red flags to watch for in scam emails is that the bank, title company or attorney is telling you there is a last-minute change to the closing information or that you were given the wrong information. They may often create a sense of urgency stating that you must wire the money right away to avoid any delays in the closing or use CoVID related excuses. Scam emails often end in “Kindly”. Because the email looks legitimate, with all the details one expects and the exact amount to be wired that was already stated, it is easy to be misled.
To avoid falling prey to scammers, consumers must be diligent and catch wire fraud before it happens. To start you should make sure that you have strong passwords on your email. Be careful clicking on any links or attachments that you are sent unless you are expecting them and have double checked the email address. Remember many emails used by scammers look legitimate, with web addresses, phone numbers, pictures and emails that may only be one character off, so look at the email address carefully. When you get wire instructions asking you to wire money, call the title company directly with a number that you google search yourself. Do NOT use the number that is provided in the email, title companies will always tell you to call before wiring money to make sure you have the right info, but it is important you look up the info on your own; this will give you another level of protection. Talk to your bank before you wire the money and make sure they have the correct wire instructions you just received when talking to the title company. Once you have wired the money call the title company to see if they have received it.
If you find out that you have been scammed, call your bank immediately, you typically have 24 hours in which to get your money back, very few people get their money back if they wait too long. Do not be embarrassed, contact your bank and authorities immediately upon finding out you are a victim of fraud. Contact the FBI’s Internet Crime Complaint Center at www.IC3.gov.
If you keep this information in mind as you are going through the home buying process, you will be more confident and avoid the pitfalls of other buyers. We hope that being an informed and diligent consumer will help keep you safe in what should be an exciting time in your life!
By Carrie Ernst
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