Wire fraud in on the rise at an alarming rate causing homebuyers to lose millions of dollars every year. It works like this: after illicitly monitoring the email accounts of a real estate agent or settlement company to determine the likely timing of a close of escrow, and once the criminal identifies a victim in the process of buying a home, the hacker will send a fraudulent email to the buyer, posing either as the real estate agent or escrow officer.
The email will say there are “new” wiring instructions or routing information and will request that the buyer send the transaction-related funds accordingly. Because the email looks entirely legitimate, unwittingly, the homebuyer then wires funds directly into the hacker’s account. Unfortunately, once the funds are sent, the money is gone.
Unlike many other email-based phishing schemes, real estate wire fraud is becoming increasingly sophisticated and less recognizable due to an electronic form of forgery known as spoofing. Spoofing is the forgery of an email header so the message appears to have originated from someone other than the actual source. Because the hackers have obtained information from multiple sources involved in the transaction (agent, escrow officer, lender), they can generate spoofed emails from these parties, too; making it all the more believable that the email is legitimate.
These communications do not contain the typical grammatical errors and odd semantics that are often found in scam emails and that are easily recognizable as a scam. Because the fraudster has been monitoring the accounts, the fraudulent communication usually contains detailed and accurate information about the specific transaction adding to the forged email’s validity.
So what can you do? For starters, never respond to wire instructions via email. Prior to wiring funds, contact the intended recipient via a verified telephone number and confirm verbally that the wiring instructions are accurate. Do not rely on telephone numbers or website addresses provided in an unverified email as the fraudsters often provide their own information here. Finally, do not open, click on, or respond to suspicious sounding emails. Security experts recommend “going with your gut.” If an email communication seems at all suspicious, do not open it, and take the time to verify its legitimacy.