Wire fraud and real estate transactions

Wire transfers have obvious advantages in efficiently facilitating a real estate transaction, but they have made us all more vulnerable to fraudulent activity. (Photo courtesy of Crew at Unsplash.com).

Duane Duggan, Realtor and Author, RE/MAX of Boulder

Duane Duggan, Realtor and Author, RE/MAX of Boulder

BOULDER – This year electronic real estate transactions have undergone an onslaught of attacks as cyber-criminals attempt to steal wire transfer funds. Yes, even right here in Boulder! Sophisticated hackers have stolen hundreds of thousands of dollars by re-directing wiring instructions in the middle of a real estate transaction. For many clients, their entire life savings have been lost due to wire fraud. 

Wire transfers have obvious advantages in efficiently facilitating a real estate transaction, but they have made us all more vulnerable to fraudulent activity. The most common tactic is to hack into the e-mails of the parties involved in a real estate transaction including the e-mails of buyers, sellers, real estate agents, title companies, lenders, and so on. The hackers gather information from the e-mail chain, then start sending out spoof e-mails from a new e-mail account that is very similar to the legitimate one. For example, the e-mail address might be only one character different from legitimate e-mail address, making it very difficult to notice. The spoof e-mail message will state that there is a last-minute change in the wiring instructions.  That is when the unsuspecting victim sends off their hard-earned money to the scammer’s fraudulent offshore account instead of the correct party. The cyber-criminal will then immediately withdraw the funds from the fraudulent account, and often the money is gone and cannot be recovered.

How to prevent this from happening to you:

Best e-mail practices
Unsecure e-mail accounts are open doors for cyber-criminals. Follow these guidelines to help keep that door securely shut and locked tight.

  • Whenever possible, avoid sharing sensitive personal information or financial information via e-mail.
  • You should never receive an e-mail request for sensitive information from your Realtor, banker, lender, or title company.
  • If you must send sensitive information or financial information via e-mail, make sure to use encrypted e-mail.
  • Never trust contact information in unverified e-mails. Watch for suspicious e-mails, such as e-mail addresses with one or two characters different from the e-mail address of a trusted source.
  • If an e-mail looks even slightly suspicious, do not click on any links in it, do not open any attachments, do not call any numbers in the e-mail, and do not reply to it.
  • Do not use free Wi-Fi to transact business, i.e., free Wi-Fi at coffee shops, airports, etc.
  • Avoid using free e-mail accounts for business.
  • Use strong passwords and change them frequently.
  • Keep your operating system, browser, and security software updated.

Best wiring practices

  • Never trust or utilize wire transfer information that has been sent to you via e-mail without first calling your Realtor or the title company directly (not utilizing any phone numbers within the e-mail) to verify the instructions.
  • Never rely on phone numbers or website addresses provided within an unverified e-mail as scammers often provide their own contact information and set up convincing fake websites to support their schemes. Verify phone numbers independently and call those numbers to confirm the wiring instructions.
  • When wiring money, the person doing the wiring should pick up the phone and call the intended recipient of the wired funds immediately prior to sending the funds. Then call afterwards to confirm the receipt of the funds.
  • Get to know the parties involved in your transaction early on. A sudden or last-minute change in a title company’s closing personnel is suspicious. Scammers will often make up stories such as, “your closer had to take their child to the hospital, so wire your money here instead”.

Instead of using wire transfer, check to see if the title company will accept a cashier’s check for down payment.

If you have seen any suspicious activity, report it to the proper authorities. In this case, the Colorado Bureau of Investigation.

By Duane Duggan, RE/MAX of Boulder. Duane Duggan has been a Realtor for RE/MAX of Boulder in Colorado since 1982 and has facilitated over 2,500 transactions over his career, the vast majority from repeat and referred clients. Living the life of a Realtor and being immersed in real estate led to the inception of his book, Realtor for Life. For questions, e-mail Duane at [email protected], call 303.441.5611 or visit boulderco.com.