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In today’s increasingly tech-savvy world, wire fraud is a mounting source for concern. According to a 2016 report released by U.S. Federal Bureau of Investigation, these hackers have attempted to steal more than $5 billion since 2013.
But what does it mean for you? Potentially, quite a lot.
What is Wire Fraud?
Wire fraud indicates fraud achieved through phone lines, wires or other electronic means. Perpetrators scam their victims out of money and typically do so through sophisticated hacking techniques.
Wire Fraud and Real Estate
When National Association of Realtors® General Counsel Katie Johnson asked a group of real estate professionals about their experience with wire fraud, more than one-third claimed they or someone they knew had customers that were victims of wire fraud.
Real estate transactions often involve large sums of money being transferred from one party to the next, making this industry a prime target for hackers. Upon gaining access to an agent’s email account, they can easily acquire information to trick home buyers into rerouting funding from their lender to a fraudulent account. Once the money is sent, it’s gone.
While the idea might seem far-fetched, it’s more common than you think. Hackers are smart and their methods are constantly evolving.
After months of searching for the perfect home, you finally find the one. It’s a single-family home in a great location priced at $250,000. You’ve worked hard to make this dream a reality and couldn’t be more thrilled to start this next chapter of your life.
Several days after finalizing the transaction, you receive an email from your real estate agent asking that you wire your payment of $250,000 to another account. The email includes some of your personal information, such as the listing address, sale price, loan amount, and even your full account number, and you reroute the money without a second thought.
But as time goes by, something just doesn’t seem right. You haven’t heard from your agent and decide to contact the escrow company to confirm they received the payment only to discover you’ve been a victim of wire fraud. They tell you to wait for law enforcement to investigate the situation.
A member of the Cyber Crimes Taskforce contacts you. Apparently, hackers sent the email from your agent’s account to you and even went so far as to include your personal information to validate the transaction. You’re instructed to contact their lender and request a wire recall, although it’s a longshot as several days have passed. Unfortunately, your loan went through and you’ll still be expected to make payments on a home you don’t own. There’s nothing anyone can do at this point to get the money back and you’re forced to file for bankruptcy.
When it comes to avoiding wire fraud, preventative care is key.
How-to Protect Yourself
1. Request your agent not discuss personal financial information over e-mail.
2. Determine what your agent’s communication practices are.
3. If you need to do a wire transfer, call your agent on the phone immediately prior to the transfer of funds so you know you’re sending money to the right source.
4. You and your agent should avoid free Wi-Fi with no firewall to protect against hackers capturing an e-mail password or other sensitive information.
5. Always use strong passwords and change them regularly; advise your agent to do the same. It also wouldn’t hurt to change your password before wire instructions are sent.
Remember, knowledge is power. Get ahead of the curve and talk with your agent about safeguarding your assets today!