The threat of wire fraud is real. Find out how to identify home buying scams and protect your money from scammers.
In our ever-advancing hi-tech society, much of our information is shared online and via email. Real estate transactions are no exception, with electronic signatures and online wire transfers becoming the norm. As convenient as this may be, it also creates a vulnerability that hackers can exploit.
The Federal Trade Commission and the National Association of Realtors recently issued a warning to homebuyers about email and money wiring scams. Millions of dollars have been lost because of sophisticated wire fraud scams.
Here’s How The Scam Works:
The email of a homebuyer or real estate professional is hacked by scammers phishing for financial information. The hackers scan for emails containing information about real estate transactions, learning the planned purchase date, closing date, and dollar amount needed at closing. Then they send out an email to the buyer posing as the real estate agent, title company, or escrow company involved in the transaction. They indicate there has been a last minute change or an “update” to the wiring instructions for the home purchase, and will provide the buyer with new wiring account information.
Once the homebuyer wires the funds into the scammer’s account, the account is usually cleared out in minutes, and the funds gone forever.
How To Protect Yourself Against Wire Fraud
No doubt you’ve been saving for a while and want to protect your money. You’ve done the due diligence on your target property and have spent months (likely more) researching everything for this big decision. Don’t let your guard down at the finish line. There are a few things you can do to make sure your money gets into the right hands.
- Talk to your real estate agent to understand the money transfer process before you enter into the transaction
- Don’t email financial information. It’s not secure
- If you’re giving your financial information on the web, make sure the site is secure. Look for a URL that begins with https (the "s" stands for secure). And, instead of clicking a link in an email to go to an organization’s site, look up the real URL and type in the web address yourself
- Be cautious about opening attachments and downloading files from emails, regardless of who sent them. These files can contain malware that can weaken your computer’s security
- Keep your operating system, browser, and security software up to date
- Call the intended recipient just before you transfer the funds to let them know you are making the transfer and to verify the wire transfer details
It’s always best to be cautious, particularly with large investments. Get as much information as you can and always verify the information you receive.