Resurgence of wire fraud scams alarms NAR
Wire fraud, or fraud using telecommunications technology, is on the rise in real estate transactions, according to a new report in the Washington Post.
The scam works like this: hackers gain access to either the buyer’s, seller’s, agent’s or title company’s email account, and they then monitor the real estate transactions that take place. When a buyer is close to settling, the scammer sends an email with either a last-minute change in wiring instructions or request for additional funds to complete the transaction. The new instructions require the buyer to wire the money to a separate account owned by the scammer.
While real estate scams are nothing new, of concern to the National Association of Realtors (NAR) is the sophistication of the scams. In addition, most lending institutions offer little to no reimbursement for wire fraud.
Katie Johnson, general counsel at NAR, commented to the Washington Post that the amount of reports of wire fraud has gone up, although they don’t know how much money overall has been lost.
“Someone in Chicago recently lost $130,000, and in Texas there was a recent loss of $30,000,” said Johnson. “It is prevalent, and it is increasing.”
It’s important that agents take steps to protect themselves and their clients from fraud, and there are some easy ways to keep everyone involved in a home purchase safe:
- Require two-step verification from clients before major cash transactions take place. This should be done using the phone number they have been using throughout the transaction. Typically, scammers will include a phone number in emails that reach the client, so it’s important that clients have a number they can reach their agent at; additionally, clients should not trust any addresses or phone numbers within an unverified email.
- Never send any sensitive financial information through email.
- Clean out email accounts regularly. Backlogs of emails can allow anyone with access to the account to see patterns in business practices, in addition to sensitive personal information.
- Change passwords on a regular basis, and keep firewall and anti-virus software up-to-date.