Closing wire fraud

A scammer starts by hacking the email inbox of a principal party in a real estate transaction. Most commonly, it’s a closing or title company, but they may even assume the identity of  the real estate agent. These hacks are difficult to detect because the scammers aren’t doing anything other than observing their target’s communications.

Once they’ve identified an imminent closing, the scammer creates a fake email address from what appears to be a reputable source. Then they provide the real estate buyer with wiring instructions for closing funds, directing them into that account.

Unsuspecting buyers then wire their funds to the scammers instead of the closing company, often to the tune of tens or even hundreds of thousands of dollars. Funds wired to nefarious accounts, especially in offshore and often unregulated banks, are incredibly difficult to recover and are often never seen again

Unfortunately, the warning signs of this particular fraud are incredibly difficult to spot since most of the groundwork for this scam is laid passively when the thieves are observing and gathering information about their marks.

However, I can take steps to protect my clients and myself. I ensure that my client and myself  have a clear understanding of where the wiring instructions are coming from in any transfer of funds. Communicate clearly about who will be sending them and when they will arrive. That way, if they arrive at a time you’re not anticipating, you’ll know to be on alert.

If I am going to exchange sensitive information via email (which, honestly, is a reality in the real estate business), I make sure I'm following all the security protocols, enabling two-factor authentication, and keeping all my business email in one place—rather than spreading it across my business and personal accounts. The simplest way to protect my clients and myself is to pick up the phone and call the title company to verify any emails I or my client receives.