In 2017, almost 1 billion dollars were stolen via wire fraud.
The biggest financial threat in our real estate world today is wire fraud. I am sure you have been inundated with those words incessantly. That’s good, because the Chippewa Valley is the type of community thieves like to attack. In 2016 roughly 19 million dollars was stolen via wire fraud….in 2017 that number jumped to almost 1 billion dollars. Yes…1 billion. 2019 could be higher. The threat of wire fraud causes worry to us as the escrow agent, but also you, as the Realtor.
Don’t panic yet! It's a scary subject, but with effective communication and procedures in place, we can outsmart the thieves.
Wire fraud is most commonly being perpetrated via email.
Fraudsters are hacking non secure email accounts of Realtors, Lenders or Escrow Agents and monitoring them until the right time to strike. This is how it works: The fraudster will send an email to your client. It looks legitimate to your client, probably has your signature area and has some specific information about their transaction in the body of the email. They are diligent enough to send a few “tester” emails to gain your client’s trust and then go for broke. They will send an email to your client with attached wire instructions from the title company, telling them to wire a certain amount which is needed to close. Your clients, of course, think this is all legitimate so they wire the funds. 99.9% of the time….that money is long gone. What to take away from this is that fraudsters are patient….they will monitor 100’s of emails from all over, waiting until the time is right to pounce. It is up to us as joint partners in real estate to stay diligent.
To prevent a catastrophic loss of your client’s money and their trust in you, you need to educate every one of your clients in every transaction.
- A lot of Realtors like using Gmail, Outlook, AOL, etc…..these are not secure platforms and it is the easiest route for criminals to hack. If your agency has a secure email platform, use it, it is there for your protection. Once they have your email account it’s game over.
- Inform your clients which title company they will be working with and who internally will be contacting them.
- Never send the title company’s wiring instructions. That is the title company’s job. Let your clients know that they will never receive requests to send money from you. If they do, they should notify you immediately because your email has been compromised.
- Fraudsters are clever. They will send emails to you, your client, title companies and lenders and the emails can be made to look like they are legitimate. They will cut and paste signature lines making it all look formal. The best way is to scroll over the senders email address; that is something they cannot replicate. They will make it look good to try and fool you and make firstname.lastname@example.org look like email@example.com. It is good practice to use your company email rather than generic email domains. The more secure the better!
- Wiring money has become commonplace in our fast paced, get it done now world. Title companies respect that, but as a reminder we don’t require it to be done. A cashier’s check brought to closing is just as good.
- Title companies should have a wire fraud plan in place. There are insurance coverages available to protect the clients’ money in case of fraud.
- Do not rush. We all want deals to close and close as quickly as possible. That’s what the fraudsters want as well. They want us to rush and hopefully make a mistake. Communication is key all around. If something doesn’t seem right please trust your instinct and question the situation. We are still a small community in which most of us know each other, don’t hesitate to call the title company directly to discuss anything out of the ordinary. Don’t leave it to chance.
We do not want to scare people away from selling or buying a home. It is the largest purchase most people will make in their lifetime. We all need to be cognizant of today’s cyber threats and treat each transaction with concern for the client’s financial well-being. Cyber fraud is a dangerous, pervasive and a continuing problem in our industry. Staying one step ahead of the fraudsters will require all of us to remain diligent and paranoid, and not taking anything for granted. Working together as an industry, we can help stop would-be fraudsters in their tracks!