Real Estate Wire Transfer Fraud

March 12, 2021by Brian Walsh

Real estate wire fraud scams are on the rise, with nearly $221 million stolen from just under 12,000 victims in 2019. Fortunately, you can protect yourself from these scams by understanding what they are and how to avoid them.

What IsReal Estate
Wire Transfer Fraud?

Could you fall victim to real estate wire transfer fraud? These types of scams are more common than you might think.

Also known as escrow fraud, real estate wire fraud preys on victims’ ignorance and busy schedules. The hacker will pose as a real estate professional or home seller, relying on common techniques to make it seem as though they are acting on behalf of an agent, lender, or title company.

From there, they’ll work to convince you to transfer your closing costs to a fraudulent account—all under the guise of helping you with your transaction.

It may sound alarmingly simple—and it is. Escrow fraud is a common scam relying on fake email accounts, websites, and phone numbers to impersonate people or agencies you trust. The following techniques are used most frequently:

Business email compromise (BEC) – This form of escrow fraud targets businesses working with foreign suppliers, or those that complete wire transfer payments on a regular basis.

Email account compromise (EAC) – Targeting individuals, hackers in this type of scam compromise the victim’s email account with the goal of transferring their funds.

Phishing and pharming – These are unsolicited emails, text messages, and phone calls—requesting a wire transfer from a seemingly legitimate company.

Spoofing – This scam type involves contacting the victim through falsified contact information that may appear legitimate.

We’ll focus on the latter two in the next section. The important thing to note right now is that you don’t have to fall victim to escrow fraud. With insight into how these scams work, you can understand what real estate wire fraud looks like and keep it from happening to you.

How DoReal Estate Wire
Transfer Fraud Scams Work?

Could you fall victim to real estate wire transfer fraud? These types of scams are more common than you might think.

At first glance, the emails and texts you receive from a scammer can look nearly, if not entirely, authentic. For instance, if the name of your lender is Maplewood Mortgage, a phisher might create an email account and website that’s almost identical: say, Maplewoods Mortgage, or Maplewood Mortgages. The slight difference can be easy to miss if you’re under stress or in a hurry, making escrow fraud all the more alarming. In certain cases, the email will even contain hacked—or phished—personal information to help facilitate trust.

In other cases, the scammer might rely on a technique called spoofing mentioned briefly in the previous section. Have you ever received a scam call from a trusted number—or from the same area code even though it’s clear the caller is located elsewhere? This is what spoofing looks like.

It occurs when the hacker uses software to make it seem as though they’re contacting you from a legitimate source. This is pretty troubling where your precious funds are concerned.

But it makes sense, right?

The goal of mortgage wire fraud is to get you to transfer your closing costs into the scammer’s account. And since no person in their right mind would do this willingly, the scammer will try to pose as someone you know.

They might tell you there’s been a last-minute change in banking protocol, and that you’ll have to act quickly to complete the transaction. Or—again under the guise of working for the lender, agent, or seller—they might tell you they submitted the wrong address the first time around.

Some scammers email the buyer instructions, while others contact the title company with a request to wire money to the seller. The scam works the same way in both cases. And while it’s easy to assume you won’t fall for a scam, escrow fraud happens more often than anyone would hope.

In fact, it’s still happening in the wake of COVID-19. And according to the Federal Trade Commission, these scams have been prevalent for quite some time. Mortgage wire fraud attempts increased 1,100% percent from 2015 to 2017, causing consumers to lose a remarkable $1.48 billion in real estate costs in 2017 alone.

The bottom line: Since it’s difficult to get your money back after initiating a transfer, you’ll want to proceed with caution before wiring money to a potential scammer.

What To Do4 Tips To Help Avoid
Real Estate Wire Fraud Scams

Real estate wire fraud can leave you buried in debt. It can cause stress and anxiety, eat up valuable time, and even delay your closing. Don’t let it happen to you. With these four best practices in your arsenal, you can protect yourself and your loved ones from real estate wire fraud scams:

1. Double-check a potential scammer’s contact information.

If you think you’ve received a text or email from someone you trust, think again—or at the very least, double-check the sender’s contact details. You’ll want to verify that the email address isn’t a letter or two off from normal, and that you’re working with someone directly at the company.

Be sure to follow your instincts if you sense something isn’t right. All it takes is a few extra seconds.

2. Never use the phone number or bank account details listed in the fraudster’s text or email.

While calling your realtor, lender, or title company contact is perfectly valid, you should never use the phone number in the scammer’s text or email.

It almost certainly belongs to a thief rather than someone at the agency you are actually working with. In this same vein, avoid sending money in response to a seemingly urgent text or email. Always, always proceed with caution.

3. Always get a second opinion on suspected escrow fraud.

Concerned a potential scammer is reaching out to initiate a wire transfer?

If you are even the least bit concerned, contact a loved one—or better yet, your real estate agent, lender, or title company—if you’re worried you might be getting scammed.

They will give you all the information you need to determine whether the request is a scam. Perhaps most importantly, they’ll bring you peace of mind—which brings us to our next tip.

4. Contact your title company if you’re concerned.

Work with a trusted title company, and you’ll have a team committed to your financial well-being just a phone call away. Experts who deal with escrow accounts typically require written notarized statements authorizing the transfer of funds. These types of safeguards can help to prevent wire fraud by making it clear right off the bat when something is off.

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