Have you heard the story? Buyers, preparing to close on their new home, wire the down payment to the account number emailed to them. When they show up at the closing table days later with proof of the wire transfer, they discover the account number they were provided with was incorrect. In fact, it was never sent to them by the title company. They were targeted by a cybercriminal.
“It’s an epidemic now,” says Diane Tomb, CEO of the American Land Title Association, the national trade association for the title industry, in a recent AARP article. “Four years ago, we heard about this kind of thing a couple of times a month. Now it’s multiple times a day.”
How wire fraud works
Real estate transactions are an easy target for criminals because they can weaponize public information. Armed with the necessary real estate information, they will send targeted and timely emails to someone involved in a deal — typically a real estate agent, real estate attorney, title agent, or, sometimes, a home buyer.
Using tactics like a phishing text or email with a link that, when clicked, downloads malware or obtains login credentials, they can take control of someone’s computer or email account. Once they have access, they watch and wait for closing instructions to be sent – which they intercept.
Using their knowledge of this private information, they impersonate a trusted party in the transaction and divert wire transfers to bank accounts under their control. Buyers show up to the table learning that their life savings are gone.
What real estate agents can do
Buying and selling real estate is an emotional process. During this time, you have been a trusted confidant to your clients. As you make the final preparations to close the transaction, you can help protect your clients from becoming victims of cybercriminals.
The key to wire fraud prevention in real estate is education.
Inform your clients about the risks associated with wire fraud. Ensure they are aware of the common tactics scammers use and emphasize the importance of verifying any financial requests through multiple channels.
Keep all communication secure.
Encourage secure communication channels, such as encrypted emails and phone calls, when discussing sensitive financial information.
Implement two-factor authentication.
Utilize added security features for all email accounts and online platforms used during the transaction process. This adds an extra layer of security to prevent unauthorized access.
Establish a secure line of communication.
Connect your clients with the title company to verify wiring instructions before any funds are transferred.
Stay current on the latest cybersecurity best practices.
Share your knowledge with your clients.