In 2017, close to $1 billion was “diverted or attempted to be diverted” from real estate transactions, according to an article in the Chicago Sun-Times titled Hackers scam homebuyers out of millions — and it’s getting worse.
That figure is so staggering, that it’s clear no one is immune. You need to know how to protect yourself so you don’t become part of the statistic. And the best way to protect yourself is to know how this happens in real estate transactions.
Hackers monitor the inboxes of real estate agents, lenders, title companies and, at times, you. They use scraping technology to pick out key terms that indicate a real estate transaction is underway. They then identify when, exactly, the closing will take place. Once they have that information, they create a fake email to the homebuyer or seller – that looks incredibly legitimate – with a change in wiring instructions.
Because of how legitimate the email looks, no one questions this change in the wiring instructions. They comply, which in turn sends hundreds of thousands of dollars to the wrong place.
How you can protect yourself from real estate wire fraud
Have all parties involved state their communication practices. From the start. This includes your real estate agent, escrow officer, and lender. That way if you receive something that doesn’t comply with these practices, you know something might be off.
Use safe internet lines. Wi-Fi at the coffee shop is convenient. But every time you hop on Wi-Fi without firewall protection, you’re opening yourself up to hackers who can easily capture your email passwords and other sensitive information.
Stay vigilant with passwords. Use strong passwords made up of various characters, and change them regularly. In fact, it’s a good idea to change your email password just before your wire instructions are sent.
Avoid sending personal information via email. Your Social Security number, bank account information, etc. should be provided over the phone or, if possible, in person.
Don’t open suspicious emails. These emails and their attachments can include malware that serves as a gateway into your computer system.
If you expect to engage in a wire transfer, let the title company or real estate agent know that the instructions should be sent via encrypted email (including attachments), via a landline Fax, USPS, or hand delivery.
Once you do receive your instructions, call the person/company who you are transferring funds to confirm you are wiring money to the right person. Don’t call the number in the email associated with the transfer instructions. It could be a fake number (if that email is fake). Use the number you already have on file.
In short, if you receive an email with a change in wiring instructions, be suspicious. Title companies rarely change wiring instructions.