Everywhere you turn there is someone trying to scam you. That includes being a victim of sort fraud during a real estate transaction. That includes identity theft, being a victim of rental scams on Craigslist, and wire fraud.
A real estate transaction involves a lot of money. With a lot of money the scammers come sniffing around to get their hands on it.
In the past couple of years, we have seen an increase in wire transfer fraud in real estate transactions.
Wire fraud is a criminal activity where a person is defruaded by means over a wire. That could be analog like telephone fraud. This could include telemarketing scams, identity theft scams or anyone collecting money fraudulently. Or it can mean the internet, like email phishing scams and wire transfer fraud.
Wire Fraud is a felony and is handled by the FBI.
Wire transfer fraud is popular among scammers because real estate transactions are hurried and parties are frazzled and may not pay attention. Again there can be a lot of money at stake.
A scammer will hack into a lawyers, real estate agents, title company or lenders computer system to get the details of a real estate transaction about to close.
They will then email a buyer or a seller posing as a party to the transaction with instructions on where to wire and how much money for the closing. The buyer will instruct their financial institution on where to wire the money.
Before any party to the transactions is aware of the scam the scammer has received their money and moved on. A wire transfer is final and it is almost impossible to reverse once completed.
Scammers can be very tricky and use an email address very similar to what you are familiar with. Sometimes they can hack into an email system and send out instruction from a valid email.
If you get instructions to wire money by email, take the time and call whoever sent the email to confirm the details. You have already spoken to the attorney, the lender, the agent.... you have their real phone number and you know their voice.
Be Wary Of Last Minute Wiring Instructions
Wiring Instructions rarely change. Be very suspicious of last minute wiring instructions.
Scammers like to take advantage of the last minute chances before holidays and weekends. A wire transfer allows them time to get their money and disappear before anyone notices.
Know What The Wiring Instructions Are Ahead of Time
If you know you are going to need to or want to have money wired, seek out the instructions or provide the instructions ahead of time.
Seeking out wiring instructions yourself and before you need them when it won't be rushed will give you time to verify the information.
If your gut is telling you something is wrong, investigate. You are probably right. The email address may seem off or the instructions don't make sense or maybe the numbers don't seem right.
There is too much money at stake for you to make a mistake.
As I pointed out, during a real estate transaction you know your lawyer's, agent's, or mortgage broker's phone number. You know their voice. If you get the information in person or over a verified phone number you know the instruction are correct.
Use A Cashiers Check, Don't Wire Transfer Funds
A simple solution is not to wire funds or have funds wired to you. Bring or pick up a cashier's check.
Practice Good House Keeping
It is good advice to practice good housekeeping of all your online accounts with strong passwords or two-step verifications. Make sure you have a good firewall and malware protection to prevent from getting hacked yourself.
While it is more common for a buyer to get scammed a seller who want's their fund's wire transferred could get scammed as well.
Call the Police. Immediately report any wire fraud to the police. They will at least send you in the right direction. It is most likely a case for the FBI since wire transfer fraud is a felony and usually occurs across state lines.
Call The Entity Initiating The Wire Transfer. Call your bank and see if the wired funds can be frozen. Most likely it will be too late. But they will also have details of the transaction for you to turn over to the police or FBI.
The best defense against wire transfer fraud is not to let it happen in the first place. Once it happens it is almost impossible to recover the money, especially if it goes overseas.
Be aware of wire transfer fraud when getting involved in a real estate transaction. Take the steps to avoid having it happen to you.