Maybe you have read some of the scary headlines about wire fraud:
“Kansas City couple loses their entire $130,000 deposit in a real estate scam.”
“Homebuyers lose life savings during wire fraud transaction.”
Unfortunately, these are real stories, with real people involved. Not only is wire fraud real, but it is also on the rise. In 2016, the FBI reported an astounding 480 percent increase in fraudulent wire transfer complaints reported to their internet crime complaint center. It isn’t hard to understand why real estate transactions are being targeted. The last-minute nature of closing a real estate transaction, the high stress levels of the parties involved, and a large amount of money being transferred make a pending real estate transact an ideal target for scammers.
So, how does a typical scam work? It usually starts with a scammer compromising the email account of one of the parties involved in the transaction, such as a lender, a title company, or even a real estate agent. Once an email account is compromised, the scammer can monitor email communication between the parties involved in the transaction and strike when a sale is just about to close. They will likely do so by sending an email, posing as one of the parties involved, and providing the buyer with bogus instructions for wiring funds. Imagine how easy it is to be scammed when you are dealing with a host of last-minute details to finalize your purchase: transferring utilities, reviewing closing disclosures, packing, planning, and scheduling. There are a lot of balls in the air, and scammers know that and take advantage of the vulnerable state of both buyers and sellers.
Here are a few simple steps to protect yourself from wire fraud:
- Never provide or accept wiring instructions via email. If you are going to wire funds for a closing or a deposit, make sure to provide or obtain wiring information over the phone only, by a call that you initiate, to a number that you have verified from a trusted source.
- Don’t react immediately to emails. Check email addresses closely and verify authenticity. Oftentimes scammers will pose as someone involved in the transaction by only slightly changing the email address of the person they are posing as, making it easy to overlook the subtle difference.
- When you read the email, does the grammar or the sentence structure seem off? This could be another red flag.
- Be suspicious of any last-minute, urgent requests via email. Remember, a scammer will send urgent requests and instructions at the last minute by design, counting on getting you at your most vulnerable moment when you are rushed and your stress level is high.
These are just a few tips, but to learn more, check out this article recently released by the Consumer Financial Protection Bureau (CFPB), which provides more tips on how you can protect yourself.
Buying a home should be an exciting time. Don’t let yourself fall victim to scammers. If you want the help of a real estate professional to guide you through the process, call one of the experienced agents here at Sunday River Real Estate.