Wire Fraud in Real Estate Closings - and what buyers can do to protect themselves
May 4, 2017
New, sophisticated scams specifically targeting Real Estate Closings are taking place across the United States. Oftentimes, these scams involve a nefarious third party sending what appear to be valid wire instructions to an unsuspecting buyer. They use an email address appearing to belong to the closing attorney or real estate agent. They may even have information that makes their email appear legitimate - details about the purchase price, property address, or even the date of closing.
The buyer opens the email, see the wire instructions, and sends out the money - and never sees it again. The attorney doesn't have it. The seller doesn't receive it. The closing doesn't occur. And everyone is extremely unhappy.
Thankfully, there are simple steps you can take to help reduce the risk of fraud. Spending even a few minutes doing this could save a buyer headache and heartache down the road. Below are a list of measures that can be taken to help protect yourself.
1. Get wire instructions from the closing attorney's office in person. Hands down, this is the best way to ensure that you've got correct wire instructions. The information comes straight from the source. Your attorney will most likely require that you sign an acknowledgment confirming that you've received the instructions from the office.
2. Authenticate wire instructions received by email. If you can't go to the attorney's office and need instructions sent by email, you can take a few easy steps to verify the instructions are correct. First, call the attorney's office any time wire instructions are received. Verify the attorney's office sent them, and, after verifying, confirm that the instructions are correct.
Be certain that the phone number you call is the one the office previously provided to you. Do not assume the phone number provided in the email is correct. Cross-check the number with a quick Google search. Be suspicious of phone numbers that do not share the area code of the closing office (why would an office in Asheville have a Denver area code?)
Do not wire funds until you can confirm that the instructions are correct. You may need to leave a message at the law office. Wait until you hear back from the office before wiring any funds.
3. Double-check the email address. If you have had other communications with your attorney's office by email, make certain that the email address used to send you the wire instructions is the exact same as the address used for other communication.
4. Confirm that that the email was sent encrypted. Law offices should encrypt any emails containing sensitive information, which includes wire instructions. If you receive an unencrypted email, it should be a red flag that you may not be dealing with who you think you are.
5. NEVER accept any changes to wire instructions after the initial wire instructions are received and confirmed. Once you receive wire instructions, those instructions will not change. When you are satisfied that the wire instructions you received are correct, do not expect that any changes will be made to them. Any emails containing wire instructions with different information should be ignored (but reported to the closing attorney's office).
Remember - you can never be too careful. Buying a home is one of the largest financial commitments you may ever make. Take the extra few minutes to verify that your money is going to the right place. You - and your peace of mind - will be glad you did.
Happy New Year - Get those resolutions going!
January 6, 2014
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