Real Estate Agents and Lenders Beware: Wire Fraud is Growing
“I never thought it would happen to me” is a growing refrain from victims of real estate wire fraud. The sentence, shared by First American Title Company’s Michele Green, is one that’s becoming increasingly common as fraudster’s tactics grow in sophistication. It’s a problem that can be financially devastating to agents and lenders, begging the question, “How can we avoid it?”
Wire fraud is on the rise.
In just one year, from 2016 to 2017, dollars diverted or attempted to be diverted from real estate purchase transactions increased 5,000%, according to the Miami Herald. And the FBI reports that last year Americans lost $150 million in real estate scams. Experts suspect that only 15% of cases are reported, which brings the total lost to real estate scams alone to $1 billion.
Real estate agents, lenders and home buyers and sellers are at risk
Because wire fraud can happen during any exchange of information, real estate transactions are prime targets. Anyone who has ever purchased a home will tell you there’s a lot of sensitive data exchanged, from bank account to Social Security numbers.
To protect agents, lenders and consumers, First American Title Company offers these tips.
Consumer tips to prevent wire fraud
- Do not provide any personal information about yourself or your transaction to anyone you don’t know or who is not directly involved in the transaction.
- Don’t provide your online bank information to anyone or use public computers when logging in or otherwise accessing sensitive information.
- Always check the email address from which you receive transaction updates. If anything looks different or suspicious, call the entity (real estate agent, title company or lender) to confirm authenticity. Anything marked URGENT or RUSH should also be viewed with suspicion.
- Likewise, if you receive an email changing the wiring instructions for your transaction, call your real estate agent or lender.
- Confirm any changes to your transaction directly to the people you are working with over the phone or in person.
Wire fraud prevention tips for real estate agents and lenders
- Install a firewall.
- Confirm by telephone all emails providing wire and disbursement instructions with the relevant party. Be careful to use the telephone number you have on record, not telephone numbers provided in the email.
- Confirm the account to which you’re wiring funds belongs to or is in the name of the intended party.
- Be wary of any new deals coming out of nowhere and via email and any emails from free, public email account domains. Green warns these emails are typically followed by a request to wire out funds originally deposited by check.
- Also, watch for phishing emails. As with consumers, check the email address from which the email was sent and don’t click any of the embedded links.