In an October 2015 blog, we warned of potential wire transfer fraud in real estate transactions. Unfortunately, we have heard recently in the news that this continues to be an increasing problem in our industry as scammers are ramping up their efforts to target real estate transactions. In the most recent instance, a real estate agent’s email account was hacked by a scammer who then emailed one of the agent’s clients and told that client to wire a large amount of money to an account owned by the scammer or an affiliate. A similar scam involved a scammer hacking into a real estate agent’s account, locating a closing company’s wire instructions, and doctoring the account numbers on the wire instructions, leaving the letterhead so that the document appeared legitimate.
Due to the large amounts of money that are transferred in real estate transactions, scammers are unlikely to stop targeting them anytime soon. In response to this we must all be continuously aware and observant of these potential scams. The following are some useful tips:
- Make sure to request wiring instructions directly from the closing agent with each transaction. This will ensure that the instructions are current as well as ensure that old instructions saved in an email account have not been tampered.
- Insist that the wire instructions come to you and your client using a secure email. At Berlin Patten Ebling, we always provide wiring instructions for each transaction in the form of a secured email to protect the party delivering the wire to us. If you do not receive instructions from a secure email, DO NOT rely upon them.
- Do not forward someone else’s wire instructions. Require the closing agent or the party to transmit wire their instructions directly to each other. DO NOT GET IN THE MIDDLE. You are only creating unnecessary liability for yourself.
- Question any email that claims that there has been a change in wiring instructions, either from a closing agent or from your buyer or seller. A quick telephone call can prevent a scammer from intercepting the wire.
- Warn your clients to be vigilant and not to send wires unless they are sure the instructions have come from a trusted source.
- Finally, if you do think that your email may have been hacked, make sure to immediately change your username and password, warn clients or parties to be on the lookout for any fraudulent emails from your account, and report any fraudulent activity so that others may be aware of the attempted scam.
If you have any questions about how to best protect yourself and your clients in your real estate transactions, please contact your local real estate attorney.
Berlin Patten Ebling, PLLC
Article Authored by Jessica Featherstone, Esq. firstname.lastname@example.org
This communication is not intended to establish an attorney client relationship, and to the extent anything contained herein could be construed as legal advice or guidance, you are strongly encouraged to consult with your own attorney before relying upon any information contained herein.
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