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Wire Fraud in Real Estate - August 2017
No industry is exempt from cyber crime, and the real estate
industry has become a common target. As hackers devise plans to obtain
sensitive information about real estate transactions, real estate professionals
need to take particular interest in cyber security to protect their clients and
themselves from wire fraud.
In instances of wire fraud, a common ploy involves hackers breaking
into a real estate agent’s email account to obtain details about upcoming transactions.
Once the hackers have all the information they need, they send an email to the
buyer, pretending to be the agent or a representative of the title company.
In an email to the buyer, the hackers state that there has been a
change in the closing instructions and that the buyer needs to follow new wire
instructions listed in the email. If a buyer falls victim to the scam and wires
money to the fraudulent account, they’re unlikely to see the money again.
A potential indicator of wire fraud is an email that makes any
reference to a Society for Worldwide Interbank Financial Telecommunication (SWIFT)
wire transfer, which is sent via the SWIFT international payment network and
indicates an overseas destination for the funds.
since the emails tend to include detailed information pertaining to the
transaction—due to the perpetrator having access to the agent’s email
account—many people make the mistake of assuming the email is from a legitimate source. The email addresses often appear to be
legitimate, either because the hacker has managed to create a fake email account
using the name of the real estate company or because they’ve hacked the agent’s
actual email account.
- Never send wire transfer information, or any type of
sensitive information, via email. This includes all types of financial
information, not just wire instructions.
- If you’re a real estate professional, inform
clients about your email and communication practices, and explain that you will
never expect them to send sensitive information via email.
wiring funds, first contact the recipient using a verified phone number to
confirm that the wiring information is accurate. The phone number should be obtained by a reliable source—email is not
one of them.
- If email is the only method available for
sending information about a transaction, make sure it is encrypted.
- Delete old emails regularly, as they may reveal information
that hackers can use.
- Change usernames and passwords on a regular
basis, and make sure that they’re difficult to guess.
- Make sure anti-virus technology is up to date,
and that firewalls are installed and working.
- Never open suspicious emails. If the email has already
been opened, never click on any links in the email, open any attachments or
reply to the email.
Take the following steps if you suspect that your email, or any type
of account, has been hacked:
- Immediately change all usernames and passwords
associated with any account that may have been compromised.
- Contact anyone who may have been exposed to the
attack so they too can change their usernames and passwords. Remind them to
avoid complying with any requests for financial information that come from an
- Report fraudulent activity to the FBI via the Internet
Crime Complaint Center at www.ic3.gov/default.aspx.
Also contact the state or local realtor association, which will alert others to
the suspicious activity.
Contact CMR Risk & Insurance Services, Inc. today for
more information on avoiding real estate fraud and other types of cyber crime.