Email spoofing and wire fraud has been in the news again lately, so we're re-visiting one of our older blog posts to share some information on the subject.
In this article we’ll discuss some best practices to avoid being scammed when dealing with real estate transactions.
As real estate agents know, wiring is a common practice in real estate transactions. For those new to the industry, wiring money is one of a few ways to pay with “good funds,” or immediately available money. Other examples of good funds are cashiers’ checks, certified checks, and anything that is immediately collected. The idea is that no one wants to wait three days for a real estate closing, and a lot can go wrong in that time.
Spoofing Real Estate Professionals’ Emails
If you haven’t heard the term “spoofing,” it’s time to learn. Fraudsters find ways to forge emails with the name of a trusted person in the “from” column, and the contents of the email usually have detailed instructions for wiring a large amount of money. Usually these “spoofed” email addresses are “from” various people in a current real estate transaction, and generally at a key point in the process where funds will change hands. We have even heard of people trying to intercept the selling company, spoofing the seller’s email, convincing the title company to wire out the seller’s money to the wrong place.
But a careful reader might find that the actual email address is wrong, or a hair off. Unwary readers might immediately wire the money, and by the time the victim realizes the scam, the funds are overseas.
Arkansas Isn’t Immune to Fraud
This has even happened locally. The fraudsters are going for the lowest hanging fruits. While some agents want to work for the best company, they might continue to use their own personal email to maintain relationships in case they move companies. Older emails that have been used for years might be more hackable, and once a fraudster gets into the email, they can track down the transactions. In this case, someone’s email was hacked, and instructions were sent to another party to wire the amount of a real estate transaction. In the span of moments, thousands of dollars ended up somewhere they weren’t supposed to go.
How to Avoid Being Scammed
The absolute best practice to avoid being scammed is to call the place you’re sending the money to. Make sure to call a number you obtain independent of the email and confirm the instructions with the person in question. Checking phone numbers and emails to see if they match the original contact is a good practice, but not infallible. Fraudsters can get a local number to seem more legitimate.
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