We’ve all heard of credit card fraud, emails promising millions of dollars in an overseas account and telemarking fraud to name a few. However, a new fraud scheme is on the rise and this one involves the parties to a real estate transaction, particularly homebuyers.
Here’s how it works: Someone involved in the real estate transaction will have their email account compromised by the criminal. Unbeknownst to the parties, the fraudster will monitor the email accounts(s) collecting data in regard to the pending real estate transaction (i.e. Escrow Company, property address, buyers name, closing date, etc.). Next, just as the closing date is nearing, the fraudster will send a legitimate looking message to the home buyer appearing to come from a party in the transaction. The message will instruct the buyer to wire their closing funds and provide wire instructions. The problem is that the account belongs to the fraudster and it is typically overseas. In many of these cases the home buyer’s money is not retrievable.
Many of these wire transfers are for significant amounts of cash and for some buyers their entire life savings!
According to the FBI, these crimes have seen a huge spike in the past year. Between December 2016 and May 2018, there has been a reported 136% increase in these crimes with fraudulent transfers being sent to over 115 countries. Since 2013 consumers have lost an astounding $12 billion to these fraudulent schemes.
There are steps that homebuyers and parties to the real estate transaction can take to protect themselves:
•Be Aware—be aware that you may be targeted by scammers in this manner and act accordingly to verify any information sent to you via email especially if it contains wiring instructions.
•Email Passwords—change your passwords frequently and/or set up two factor authentications.
•Strange Links—don’t click on any strange links or open attachments if you don’t know who the sender is.
•Voice Verify—work closely with your escrow officer and Realtor and always pick up the phone and verify the information you’ve received if it is received via email. Most escrow companies will no longer send wiring instructions via email.
If you are wiring funds pick up the phone and call the escrow officer on known phone number and voice verify the instructions. These are just a few of the ways that a homebuyer can protect themselves from this fraud scheme.
Your Realtor and Escrow Officer should be able to guide you as to the closing process and the best practice to get your funds into escrow.
If you have questions regarding these wire fraud schemes or have been considering buying or selling, please contact one of our Dominion Group Properties’ Real Estate Professionals at 928.468.3232 or visit us at our Bison Ranch office in Overgaard. We’d be happy to assist you! Learn more about us at www.dgp-az.com. We at Dominion Group Properties are Your Rim Country Real Estate Professionals!