How to Recognize Real Estate Wire Fraud and Tips to Prevent It
Real estate wire fraud is becoming an all too common occurrence as people who are in the process of closing on a home or are in the market find themselves victims of a vicious scheme to defraud them of their hard-earned money.
Many of these communications come in the form of an email, and to the untrained eye, these emails can seem legitimate. However, there are certain red flags to look for that can save potential victims from falling prey to these tactics.
Beware of wire transfer requests– It is a good rule of thumb that any email requests for wire transfers of money for closing should raise an immediate red flag. If an email like this is received, immediately contact the real estate or settlement agent via phone.
Be cautious when emailing any financial information– Many title companies and lenders require wire instructions be faxed, sent by courier or requested in person. The risk of fraud through email or even phone is too great. If it is the buyer making the request to wire transfer, this should only be done in person at the financial institution.
Be cautious when replying to emails– Many times, scammers will use email addresses that seem legitimate, perhaps just adding an extra letter or character. If the name looks similar to someone the customer has been working with, instead of simply replying and emailing, hit reply, delete the email address and re-type the intended address to make sure it reaches the right person. If that person never sent the initial email, this could be a way of alerting him or her about what is going on.
Be careful when opening attachments– Do not open attachments by clicking on links and downloading files from emails. Before doing anything, check the sender’s email address. Do not just assume by the name alone that the email is from a legitimate source.
Verify the sender– Many times, email accounts, such as Gmail and Outlook do not include the sender’s email address by default. The email user will need to click or hover over the name to see the address. Another idea is to look at the signature line in the email. If the email addresses do not match, the sender is likely not someone you know or can trust.
Be wary of priority emails– If the message is marked as “Urgent” or “Rush” and the sender is asking for a quick transfer of funds, this is a strong indication of a scam. If the email ends in all caps statements such as “SEND AS SOON AS POSSIBLE,” this should signal another red flag.
What Can Be Done to Prevent Fraud?
If someone is going through the closing process, it is important to stay informed as to the protocol for transferring money. If any questions come up regarding wire transfer instructions, this communication should come from the real estate agent or settlement agent.
Many times, financial institutions are more than willing to work with the borrower to identify any issues before sending wire transfers. Many financial institutions will do this for their customers without asking and will alert their clients if they see any potential for fraud.
Another recommendation is to have the real estate or settlement agent confirm receipt of the wire transfer a few hours after the transmission is made.
Lastly, prevention can be as simple as making sure the user’s anti-virus and malware software is current and up-to-date. Also, ensure that email addresses are protected with strong passwords and that these passwords are regularly changed.
If you or someone you know believes they have been the victim of financial fraud, contact your financial institution immediately and the FBI’s Internet Crime Complaint Center at www.ic3.gov.
Attorneys’ Closing Services (ACS) provides quality, professional, timely and cost-effective documents to clients seeking assistance with real estate transactions. Built on honesty, integrity and attention to detail, ACS is owned and operated by Ron Conte and David Trevett, practicing real estate attorneys who are members of The Florida Bar and its Real Property, Probate and Trust Law Section, and have more than 50 years of combined experience in the fields of law and real estate. When you partner with ACS, you benefit from years of experience and an unmatched team approach. Whether your office needs assistance with full or partial closing processing services, ACS stands ready to assist you at a moment’s notice. We would be honored to work with you on any and all of your real estate closings. To learn more, click here or call us today at 407-270-8855 to see how we can help you.