As providers of professional transcription services to real estate entities, we are concerned to learn about the latest threat to the real estate industry, namely, wire fraud. Wire fraud refers to criminal acts done using telecommunications or information technology networks. Other than certified checks, real estate transactions are also done using wires, as they are faster and the funds are immediately available. For many people, wiring funds is the preferred method of moving money. Reports shoe that wire fraud is a growing trend in the real estate industry. According to are port from FBI published in law.com, wire fraud is the fastest growing real estate cybercrime in the U S. FBI reports indicate that in 2017, cyber criminals stole or attempted to steal almost $1 billion from real estate purchase transactions; this is up from $19 million in 2016.
Real estate is attractive to cyber criminals mainly for reasons such as:
- the diversity of targets
- they prey on unknowing home buyers who don’t know how to spot a scam, and
- the huge amounts involved–it is common for buyers to wire transfers for hundreds of thousands of dollars
According to the FBI, the Internet Crime Complaint Center has seen a 48% increase in the number of complaints filed in 2016 in the real estate industry. Most of these complaints were related to wire fraud scam becoming more common in this industry. Information is generally compromised in wire fraud scam process through phishing emails. Once hackers gain access to an email account, they will monitor messages to find someone in the process of buying and selling homes. Then emails will be sent to that account, what looks like real instructions from a title company asking the buyer to wire money to a different bank instead of what the title company had told earlier. Two victims in every scam would be the entity whose email is hacked and the home buyer whose money is stolen.
San Antonio Mom Loses $25,000 in Wire Fraud Scheme
News 4 San Antonio recently reported the case of Jayna Gibbs who lost $25,000 dollars gifted by family and friends following her husband’s death, in wire fraud. Gibbs, who planned to use the money as a down payment on her new home, got an email requesting closing funds to be wired to an escrow account. As the emails looked exactly the same as those that came from the escrow assistant and had the same logo and the officer’s name in it, Gibbs had no concerns about the validity of the email and subsequently wired $25,500 dollars as instructed. But later she got a phone call saying that the concerned title company doesn’t have a wire from her. This company also does not offer insurance for this type of fraud and she is not sure whether they are using encryption to protect private information.
Preventing Wire Frauds
- Practicing good cyber hygiene helps to prevent being a victim of such frauds
- Make sure that the emails you get in the attachments or the links are verified
- Stay alert as the most vulnerable time for a scam would be right before a transaction closes and home buyers prepare to send a wire transfer
- Consider using a cashier’s check instead of a wire transfer
- Change password regularly and avoid emailing about wiring instructions on an unsecured network
- If you become a victim, report it as soon as possible. Providing less time for criminals helps the investigators to track down the money
- Consider checking for fraudulent emails that end in .net instead of .com and whether it came in a secured manner
- Mortgage brokers, lawyers, title companies and agents should improve their internal security systems and can consider cyber insurance
Title companies handle a lot of your personal information as well. To get a loan payoff from your lender, they will need your Social Security number and loan number to get the information from your lender. Ensure that your title company does all or most of their communications over secure encrypted emails, providing an extra level of security. Realtors as well as attorneys considering services from an online transcription company should also be aware of the document security policies the company adheres to.