Cyber criminals have been targeting buyers and sellers in real estate transactions by perpetrating the email accounts of real estate professionals including agents, escrow officers, lenders, and etc., to gain access to information concerning pending real estate transactions. Scammers will generally impersonate a party to the transaction and send faulty wire instructions. Following the instructions, the victim will wire funds directly to the scammers’ account, and the money will be drawn immediately. This can cost significant loss.
Scammers can assume the identity of a party legitimately involved in a real estate transaction by many methods. The scammer can purchase a domain name that appears to be very similar to the domain name of the party’s brokerage or escrow company. Or the scammer can phish or hack the email of a party to the transaction and gain control over that email account. Either way, the scammer will send deposit or wire transfer instructions to the victim who is expecting an email with escrow instructions from the escrow company or the real estate agent. The instructions might appear to be legitimate but actually direct the funds to the scammer’s account. Recovery is often impossible.
The National Association of Realtors issued an alert regarding this type of fraud last year. Since then, the incidents of online scams have continued to escalate, and Intero has issued its own anti-fraud measures to protect our customers and clients.
- Firstly, real estate agents should alert their clients of such scams. We advise our real estate agents to add “tag language” in their communications with clients to explain that they will never be requested to wire funds directly to their real estate broker by email.
- Secondly, if possible, real estate agents should not request their clients to send confidential information via email, such as deposit instructions and account information. If unavoidable, they should use secured encrypted email accounts such as the broker’s corporate email account, rather than personal email accounts.
- Thirdly, prior to any wire transfer, real estate agents should double check by phone with clients and make sure to use a verified line.
- Lastly, real estate agents should consistently update their cyber security measures and protect their computer from being compromised by changing email passwords regularly, avoiding malicious spyware or suspicious links, installing security software and consulting IT specialists.
This list of advice is not all inclusive, there are many other precautions one should take to prevent clients from becoming the victims of cyber scams. For more guidelines, see recommendations provided by the National Association of Realtors.